ank Indonesia (BI) believes the delayed disbursement of regional transfer funds will not have a significant effect on national liquidity, stressing that Indonesia has ample liquidity to oil the economy this year.
BI deputy governor Perry Warjiyo said foreign inflows into government bonds, stocks and corporate bonds had reached Rp 160 trillion on a year-to-date basis, a 180 degree reversal compared to the same period last year, which saw significant capital outflow and tax revenue decreases.
"Liquidity in the regions is more than enough for banks. If there's a sign of tight liquidity, the central bank will add liquidity in the banking industry and in the economy so that banks are able to disburse loans to finance economic activities," he said on Wednesday in Jakarta.
Given this situation, the central bank encouraged regional governments to focus on their economic potential. For example, regional governments in the eastern part of the country have huge maritime, tourism and fisheries potential, while those in the western part have agricultural potential, he added.
To assist them in developing their local economy, BI has teamed up with the National Resilience Institute (Lemhanas) and Regency Administrations Association (Apkasi) to hold an economic leadership’ workshop that will involve 28 regents and deputy regents.
"It's expected that the program will improve knowledge to face global economic challenges and limited budgets so that local administrations can diversify and find new economic drivers," Perry said, stressing that several regions must recover from the recession that hit them in the last two years stemming from weak exports. (ags)
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