Indonesia could become Asian financial center<\/p>\n
JAKARTA (JP): Indonesia, with its free foreign exchange regime
\nand the rapid growth of its economy, has the potential to become
\none of leading financial centers in Asia, an executive said
\nyesterday.<\/p>\n
Putu Antara, an executive at Bank Rama, said Indonesia, as an
\nemerging market, has enough international recognition and
\nattracts a great deal of foreign fund managers.<\/p>\n
He noted that international recognition served as a very
\nimportant determinant for the development of any financial
\nmarket.<\/p>\n
"If Jakarta is to progress as a financial center, we have to
\nkeep fund managers' trust in our market, and most importantly our
\ndealers have to be more professional," Putu said.<\/p>\n
Putu, also chairman of the organizing committee for the 1995
\nAsia Pacific Forex Assembly, added that the quality of foreign
\nexchange dealers was one of the main considerations in
\ndetermining the recognition of a financial center.<\/p>\n
Vice President Try Sutrisno is scheduled to open the assembly
\nthis morning. Putu said some 450 bank executives and foreign
\nexchange dealers from 34 countries in the region had arrived here
\nto attend the assembly, hosted by the Forex Club Indonesia.<\/p>\n
Speakers at the assembly will include Governor of Bank
\nIndonesia J. Soedradjad Djiwandono, Chairman of Bank of Tokyo
\nLtd. Toyoo Gyohten and Lee Tsao Yuan, deputy director of the
\nInstitute of Policy Studies in Singapore.<\/p>\n
President of Forex Club Indonesia Jeffri Turangan forecasted
\nearlier that Indonesia, with all its potentials, would likely to
\ngrow as a leading international financial center, overtaking Hong
\nKong and even Singapore.<\/p>\n
Currently the daily volume of foreign exchange trading in the
\nIndonesian financial market is still very low, only some US$2
\nbillion to $2.5 billion, as compared to $80 billion in Singapore.<\/p>\n
The general manager of the treasury division of Bank Dagang
\nNasional Indonesia, Njoman Djawi, said that although Indonesia's
\nfinancial market is still young, it has grown to become the most
\nattractive market in the region due to its free foreign exchange
\nregime.<\/p>\n
However, with such a regime, Indonesia is continually open to
\nfinancial crisis and speculation by foreign dealers unless macro-
\neconomic aggregates are managed adequately.<\/p>\n
"As long as the government's macroeconomic policy is very
\ngood, nobody will like to speculate on our currency," Njoman
\nsaid. "Once the U.S. dollar reached higher than the central
\nbank's ceiling rate, but soon it went down again because there
\nwas no fundamental reasons to speculate."<\/p>\n
The government, however, has expressed concern over the level
\nof foreign participation in its debt market. It said the influx
\nof foreign capital would put heavy pressure on the country's
\nmoney supply. (rid)<\/p>",
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