BI Senior Deputy Governor Mirza Adityaswara stated in Jakarta on Thursday that the Central Bank would continue to look at the liquidity movement in the market and maintain its adequacy, so that there would be no conducive fund-raising competition.
"With regard to liquidity, since November or December 2018, we continue to conduct reverse repo auctions. We also conducted an auction for repo term several times in January," Adityaswara noted here on Thursday, Jan 17.
The condition of liquidity in the country in 2018 is still overshadowed by pressure, considering the loan to deposit ratio (LDR) of 93 percent at the end of 2018.
The LDR indicates the availability of funds (liquidity) for the bank to fulfill its credit distribution. Based on BI Regulation No. 17/11 / PBI / 2015, dated June 25, 2015, regulating the LDR lower limit is 78 percent, while the upper limit becomes 92 percent.
However, according to Adityaswara, LDR or liquidity will improve in the next few months. Some of the reasons are improved credit growth that will provoke incoming investment flows. The investment flow will also trigger an increase in Third Party Funds (DPK) so as to loosen banking liquidity.
This year, BI targets Banking Deposits to rise in the range of 8-10 percent (yoy) to help credit growth to 10-12 percent (yoy).
"The recovery in credit growth will indeed have capital inflows, and further deposit growth will start to increase again," he remarked.
In the same place, BI Governor Perry Warjiyo revealed that in addition to rupiah liquidity, the Central Bank also deepened financial markets to meet foreign exchange liquidity needs.
"For foreign exchange liquidity, as usual, we do regular foreign exchange swaps (barter) and Domestic NDF auctions. We provide a signal that foreign exchange liquidity is sufficient and can support the stability of the rupiah exchange rate," he added.