Based on recent assessment, Indonesia's financial system is in good condition from fiscal, monetary, financial supervision and deposit insurance perspectives, said finance minister and KSSK head Bambang Brodjonegoro.

"Despite the relatively good position, we still need to be aware of emerging risks, both external and domestic," he said in a press conference after the first KSSK meeting on Friday in Jakarta.

KSSK member and Financial Services Authority (OJK) head Muliaman Hadad added there had been some exposure that the KSSK had carefully monitored during the first quarter. In addition to a persistently slow global economy, the growth of bank loans has also slowed.

"As we know, the loan growth in the first three months of the year was slower than in the previous quarter," he said, adding that the low credit growth was only due to the business cycle where credit disbursement at the beginning of the year was usually sluggish.

This, Muliaman continued, should be a concern in a banking industry that is targeting loan growth of 13 percent this year. "We expect a recovery, along with economic growth, in the next quarter. I think the recovery will happen over the second and third quarters," he said.

Bank Indonesia governor Agus Martowardojo said Indonesia's economy was relatively healthy, [and would remain so] as long as inflation and current account deficit could be maintained well. (ags)

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