Banks to curb growth of credits in foreign exchanges.
Banks will restrain from providing credits in foreign exchanges
this year on high risk of liquidity amid the continuing global crisis.
Director Head of Global Banking of Citibank Indonesia Kurnadi Lie said
currently the foreign exchange liquidity is tight that banks will face
difficulty if they continue providing credits in foreign exchanges.
Kurnadi said Citibank has decided to restrain from offering foreign
exchange credits in the country. Citibank will cut new credits for
corporate to 10%-15%, down from normally 20% of its total credits. Bank
Negara Indonesia (BNI) Tbk said it will also cut credits in foreign
exchange. BNI president Gatot M. Suwondo said the state lender will
reduce new approvals for foreign exchange credits as funding structure
at present still is facing the risk of mismatch. BNI plans to issue US
dollar denominated bonds to improve its long term structure of foreign
exchange fund. The plan is to issue bonds valued at US$300
million-US$500 million this year. Data at Bank Indonesia by December
2011 showed that the total amount of foreign exchange credits surged
32.05% to Rp361.1 trillion from Rp273.44 trillion a year earlier. The
growth was sharper than the 24% growth of industrial credits. Deputy
Governor of the central bank Halim Alamsyah said earlier the growth of
foreign exchange credits was high in 2011 although declining toward the
end of that year as a result of the global crisis. This year, the growth
of foreign exchange credits is expected to be lower than in 2011.