Bank Indonesia has Rp 96t in cash ready to counter Y2K bug

Bank Indonesia has Rp 96t in cash ready to counter Y2K bug

JAKARTA (JP): Bank Indonesia deputy governor Aulia Pohan said
on Wednesday the central bank was ready with some Rp 96 trillion
(US$13.52 billion) in cash to anticipate a possible huge cash
demand before the Year 2000 (Y2K) computer bug is predicted to
strike.

Pohan said the Y2K World Committee required all central banks
to increase their cash supplies as part of the contingency plan
to deal with Y2K.

"The normal cash supply here is around Rp 19.1 trillion (per
month), but because of the Y2K (threat) the international
committee required a cash supply five times the normal level, or
around Rp 96 trillion."

He said Bank Indonesia held some Rp 70 trillion as of
November, and the remaining amount would be made available within
two weeks.

Pohan said the cash supply included the recently issued Rp
100,000 banknote.

He did not disclose the amount of the new banknotes which
would be put into circulation, but Bank Indonesia said recently
that it intended to print up to Rp 50 trillion of the new notes
before the new year.

Pohan stressed the cash supply would not spark inflation as it
would only be supplied according to the size of demand.

The Y2K bug stems from computer programs which use only two
digits to denote the year. Older computer could mistake 2000 for
1900 and crash at the beginning of next year.

Computers which are not Y2K-compliant could fail and disrupt
the banking system.

Many fear the Y2K bug would cause computers in banks to crash,
cutting out service of ATMs and paralyzing banking transactions.

Pohan reiterated that the country's banking system was ready
to tackle any problems thrown up by what is dubbed the millennium
bug.

He explained that domestic banks carried out both national and
international tests to ensure they will continue to work when the
date changes to Jan. 1, 2000.

He said that of the country's 167 banks, only 20 banks used
sophisticated banking technology, while the remaining 147 banks
used nonintegrated "local area network" or a personal computer
stand alone system which is less susceptible to the Y2K bug.

He said 20 large banks were already Y2K compliant, while the
remaining banks would complete an end-to-end test to check for
their contingency plans or that they met minimum requirements.

"We have prepared the minimum requirements which meet
international standards," Pohan said.

"We are ready to face even the worst-case scenario."

Pohan appealed to the public not to panic, urging them to
refrain from withdrawing huge amounts of money beyond their
immediate needs.

"Your money is safer kept in the bank," he said.

Pohan said that demands for cash would increase this month,
but he believed it would be due to Christmas and year-end
celebrations.

He noted the fasting month of Ramadhan also occurred during
December.

Pohan said there were already indications of higher cash
demand, shown by the slight increase in the amount of currency in
circulation, from Rp 47.5 trillion in October to Rp 48.4 trillion
in November. (rei)