Indonesia could become Asian financial center
Indonesia could become Asian financial center
JAKARTA (JP): Indonesia, with its free foreign exchange regime
and the rapid growth of its economy, has the potential to become
one of leading financial centers in Asia, an executive said
yesterday.
Putu Antara, an executive at Bank Rama, said Indonesia, as an
emerging market, has enough international recognition and
attracts a great deal of foreign fund managers.
He noted that international recognition served as a very
important determinant for the development of any financial
market.
"If Jakarta is to progress as a financial center, we have to
keep fund managers' trust in our market, and most importantly our
dealers have to be more professional," Putu said.
Putu, also chairman of the organizing committee for the 1995
Asia Pacific Forex Assembly, added that the quality of foreign
exchange dealers was one of the main considerations in
determining the recognition of a financial center.
Vice President Try Sutrisno is scheduled to open the assembly
this morning. Putu said some 450 bank executives and foreign
exchange dealers from 34 countries in the region had arrived here
to attend the assembly, hosted by the Forex Club Indonesia.
Speakers at the assembly will include Governor of Bank
Indonesia J. Soedradjad Djiwandono, Chairman of Bank of Tokyo
Ltd. Toyoo Gyohten and Lee Tsao Yuan, deputy director of the
Institute of Policy Studies in Singapore.
President of Forex Club Indonesia Jeffri Turangan forecasted
earlier that Indonesia, with all its potentials, would likely to
grow as a leading international financial center, overtaking Hong
Kong and even Singapore.
Currently the daily volume of foreign exchange trading in the
Indonesian financial market is still very low, only some US$2
billion to $2.5 billion, as compared to $80 billion in Singapore.
The general manager of the treasury division of Bank Dagang
Nasional Indonesia, Njoman Djawi, said that although Indonesia's
financial market is still young, it has grown to become the most
attractive market in the region due to its free foreign exchange
regime.
However, with such a regime, Indonesia is continually open to
financial crisis and speculation by foreign dealers unless macro-
economic aggregates are managed adequately.
"As long as the government's macroeconomic policy is very
good, nobody will like to speculate on our currency," Njoman
said. "Once the U.S. dollar reached higher than the central
bank's ceiling rate, but soon it went down again because there
was no fundamental reasons to speculate."
The government, however, has expressed concern over the level
of foreign participation in its debt market. It said the influx
of foreign capital would put heavy pressure on the country's
money supply. (rid)