The weakening of the Rupiah, What is the Impact for the Bank?

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The rupiah continued to weaken to Rp 13,800 per US dollar. As for today, Thursday (1/3/2018), the rupiah exchange rate opened at the level of Rp 13,762 per US dollar and closed at the level of Rp 13,748 per US dollar.

Throughout today, the rupiah exchange rate moved in the range of Rp 13,745 to Rp 13,817 per US dollar. Then, whether the weakening of the rupiah exchange rate affects the banks?

VP Economist PT Bank Permata Tbk Josua Pardede said the banking system in a macro condition solid and strong. Thus, banks will withstand the impact of the rupiah depreciation.

"Particularly for banks that have systemic impacts, the regulators of both BI (Bank Indonesia) and OJK (Financial Service Authority) regularly conduct stress tests in the banking system if there is a weakening of the rupiah and in general, the banking system remains stable," said Josua to Kompas. com.

He said the condition of the banking system is relatively strong in order to anticipate the impact of the weakening of the rupiah exchange rate above its fundamental level. The condition is reflected by the excellent capital adequacy ratio, which is about 23.18 percent and the core capital ratio against Risk Weighted Asset also recorded 21.50 percent.

The credit risk was down trend to the level of 2.59 percent. In addition, liquidity indicators are also very good where the ratio of liquidity (AL / DPK) of 21.5 percent. "Nevertheless, the weakening of the rupiah can affect the micro-banks of each of the banks that have debt in the form of forex and banks that have loan portfolios in foreign currency denominations," said Josua.

The weakening of the rupiah can affect the debtors of the bank in terms of repayment of debt that ultimately affect the bank's NPL.

Separately, OJK rate of exchange rate weakening not only happened in rupiah. "The weakening is not only us (rupiah), but the global almost all weakened, except the yen alone which strengthened," said Deputy Commissioner of Integrated Regulation and Supervision OJK Y Santoso Wibowo in the media briefing in Jakarta, Thursday (1/3/2018).

The weakening of the exchange rate, said Santoso, occurred because investors anticipate the rise in interest rates in the US. Most investors, he added, are already price-in, so have begun to move funds to the US.

"They are afraid of late, because if the US supply of US dollars will drop, so they take advantage of interest rates in the US," said Santoso.

He hopes the phenomenon of weakening rupiah exchange rate is only temporary temporary alias. This is in line with Indonesia's high foreign exchange reserves. "(Weakening) is not only happening in the rupiah, other currencies (also weakened), except the yen is stronger," said Santoso.