Measuring Banking Resilience in Face of Rupiah Depreciation

The sharp weakening of the rupiah against the US dollar poses a risk to banking stability, but banks have enough muscle to face the challenges.

rupiah dolar

| Elnur Amikishiyev | 123rf.com

The prolonged weakening of the rupiah will not trigger a banking crisis, supported by strong capital and good environment conditions. However, banks still face threats from the possible deterioration of liquidity and quality of banking assets.

According to the Bloomberg Generic Composite Rate Index, the rupiah exchange rate on the global foreign exchange spot market on Wednesday (5/9) hit its worst level of Rp 15,081 per USD, eventually closing at Rp 14,938. The rupiah exchange rate on the futures market (forward) soared for a one-month period hitting Rp 15,100 per USD, and Rp 15,400 for a three-month period.

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