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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.
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Title Annotation:ECONOMIC NEWS IN BRIEF
Publication:Indonesian Commercial Newsletter
Date:Mar 1, 2012
Words:253
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