{
    "success": true,
    "data": {
        "id": 1722288,
        "msgid": "rupiah-weakens-banks-face-risks-to-performance-and-asset-quality-1778183902",
        "date": "2026-05-06 20:01:00",
        "title": "Rupiah Weakens, Banks Face Risks to Performance and Asset Quality",
        "author": "Sakina Rakhma Diah Setiawan",
        "source": "KOMPAS",
        "tags": "",
        "topic": "Banking",
        "summary": "The Indonesian rupiah closed at Rp17,387 per US dollar on Wednesday, marking a 3.96% weakening since the start of the year, which poses significant risks to the banking sector through channels including exchange rate impacts on assets, borrower cash flow pressures, and liquidity strains. Economist Yusuf Rendy Manilet from CORE Indonesia warns that sectors reliant on imports are particularly vulnerable, potentially shifting risks from bank balance sheets to credit quality, with extreme scenarios like the rupiah approaching Rp20,000 per dollar exacerbating provisioning pressures under current accounting standards. Bank Negara Indonesia (BNI) has conducted stress tests indicating potential rises in non-performing loans to 3.5%, increased cost of credit to 2.2%, and compressed net interest margins to 3% under worst-case conditions involving rupiah depreciation, soaring oil prices, and higher government bond yields.",
        "content": "<p>The Garuda currency, increasingly losing its bite, appears to require\nattention from the banking sector. Citing Bloomberg, the rupiah in the\nspot market closed at Rp17,387 per US dollar on Wednesday (6\/5\/2026).\nThis position reflects a 3.96% weakening since the beginning of the\nyear. Economist from the Center of Reform on Economics (CORE) Indonesia,\nYusuf Rendy Manilet, states that the rupiah\u2019s weakening will impact the\nbanking industry through at least three channels. The first comes from\nthe asset side. Banks holding foreign currency assets, especially US\ndollars, benefit from rupiah depreciation as the value of those assets\nincreases in rupiah terms. However, this gain could be offset if banks\nhave significant US dollar liabilities. The second impact comes from\ndebtors. As the rupiah weakens further, corporate customers with US\ndollar debts but rupiah-denominated revenues will immediately feel\npressure on their cash flows. \u201cSectors dependent on imports are most\nvulnerable. At this point, risks begin to shift from the bank\u2019s balance\nsheet to credit quality,\u201d Yusuf explained to Kontan on Wednesday\n(6\/5\/2026). The third is liquidity and funding structure. Yusuf said the\ntransmission of the rupiah weakening\u2019s impact to bank liquidity and\nfunding is relatively slow. These impacts are certain to emerge\ngradually if the rupiah enters an extreme scenario. \u201cFor example, if the\nrupiah truly approaches Rp20,000 per US dollar,\u201d he said. Yusuf also\nhighlighted additional pressure from the provisioning side, where\ncurrent accounting standards force banks to anticipate future risks. The\nindustry seems to be preparing for the worst-case scenario. For\ninstance, PT Bank Negara Indonesia Tbk (BNI) has conducted stress tests\nwith the worst scenario, namely the rupiah exchange rate weakening above\nRp20,000 per US dollar, oil prices reaching 150 US dollars per barrel,\nand the 10-year government bond yield breaching 9%. BNI\u2019s President\nDirector, Putrama Wahju Setyawan, stated that in that scenario, BNI\u2019s\nnon-performing loan (NPL) ratio is predicted to increase by around 1.6%,\ncost of credit (CoC) to rise by about 1.1%, and net interest margin\n(NIM) to be pressured to a low level of 3%. For context, as of the first\nquarter of 2026, BNI\u2019s NPL position is at 1.9%, CoC at 1.1%, and NIM at\n3.6%.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/rupiah-weakens-banks-face-risks-to-performance-and-asset-quality-1778183902",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}