Jakarta –
The monetary crisis (krismon) that occurred in the 1997-1998 period was one of the worst turmoils ever experienced by Indonesia. In his presentation during the fit and proper test to become the Deputy Governor of Bank Indonesia (BI), Juda Agung revealed that the crisis started from: over borrowing which is very large.
“Private loans from abroad are good in bank loans loan nor commercial paper very big,” he said at the House of Representatives Commission XI, Tuesday (11/30/2021).
He revealed that at that time the flow of foreign capital into Indonesia was in the form of commercial paper and was direct. This was because at that time Indonesia did not have state securities (SBN).
“This then triggered the crisis in that period, August 97, the debt of course swelled, especially in corporations and had an impact on the banking sector,” he explained.
Juda said that at that time Indonesia was still under IMF instructions. At that time the government responded by raising very high interest rates. This makes corporations affected. He said that at that time the interest rate was in the range of 70%, because the inflation rate was also very high at that time.
Therefore, at this time Indonesia has learned from the global financial crisis. “Where macroprudential policy can prevent. If debt is prevented by macroprudential policy to prohibit leverage ratios that exceed the capacity of corporations,” he said.
The worst economic crisis that occurred in the administration of President Soeharto, the US dollar was in the range of Rp. 2,000-2,500 because Indonesia had not yet adopted a floating exchange rate regime. The New Order at that time did not want to know, the US dollar had to stay at that level.
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