The closure of Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank in the United States has no direct impact on Indonesia’s banking sector, Governor of Bank Indonesia (BI) Perry Warjiyo said on March 16.

The risk of direct impact is almost zero as most of Indonesia’s banks do not invest funds or deposit in these three banks, the official told the press after a BI Board of Governors’ Meeting in Jakarta.

However, Warjiyo said it is necessary to monitor the spillover effect of the incident on the market due to investor expectations or perceptions of the turmoil from the banks’ fall.

Foreign capital inflows into Indonesia's financial market, especially investment portfolios, reached 3 billion USD as of March 13 and the outflow in March reflects the growing uncertainty in global financial markets, he said.

The rupiah exchange rate increased by 1.32% this year as of March 15. However, compared to the end of February 2023, the value of the rupiah has declined by 0.75%.

BI will continue to stabilise the rupiah exchange rate through intervention and coordination with stakeholders, he said, expressing his optimism that the rupiah exchange rate will be strengthened in line with the stability of the Indonesian financial system./.

Source: Vietnam News Agency