Bank Indonesia to incur deficit, again<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
For the second consecutive year, the central bank is expected to
\nsuffer a deficit next year, attributable to the soaring costs of
\nkeeping its monetary operations intact.<\/p>\n
As stated in a report presented on Wednesday to the House of
\nRepresentatives' Commission XI on financial affairs, the central
\nbank predicted a deficit of around Rp 9.4 trillion (US$1.03
\nbillion) next year.<\/p>\n
This figure came from an estimate of full-year revenue of Rp
\n14.3 trillion, as against Rp 23.7 trillion in total expenditure.<\/p>\n
If in fact it happens, it would be BI's second consecutive
\nannual deficit. This year, Bank Indonesia is expected to incur a
\ndeficit amounting to Rp 14.4 trillion.<\/p>\n
Bun Bunan Hutapea, a Bank Indonesia deputy governor, has said
\nthat this year alone the bank would likely spend Rp 13 to Rp 14
\ntrillion to cover interest payments on large deposits made by the
\nlocal banking sector in BI promissory notes.<\/p>\n
The deposits usually stand at between Rp 130 to Rp 160
\ntrillion.<\/p>\n
In 2003, the central bank enjoyed a surplus of Rp 1 trillion,
\nthanks in part to the repayment of the central bank liquidity
\nsupport facility by the government.<\/p>\n
Elsewhere, despite the deficit, the report added that the
\ncentral bank's capital ratio against its monetary operations will
\nstand at 3.97 percent, which means the government will not have
\nto inject funds to cover BI's capital ratio shortfalls.<\/p>\n
A settlement agreement signed by the government and central
\nbank last year -- called the BLBI agreement, says that if BI's
\ncapital ratio for its monetary operations falls below 3 percent,
\nthen the government has to cover the shortfall.<\/p>",
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"sponsor": "Okusi Associates",
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