Zakki Hakim , The Associated Press , Jakarta Mon, 10/13/2008 3:50 PM Business
Indonesian authorities announced fresh measures to prevent the global credit crisis from hitting localbanks Monday and stocks halted steep falls as trading resumed aftera three-day suspension.
The benchmark JSX index dropped more than 6 percent in theopening half-hour, the first trading since Wednesday when a 10percent drop prompted authorities to suspend trading mid-session.
The index later swung to a profit and was up 0.5 percent at1,458.18 points.
Finance Minister Sri Mulyani Indrawati said the government wouldguarantee private savings of up to US$210,000 (2 billion rupiah) andmake it easier for banks to obtain short-term loans from the centralbank.
"The global financial crisis has disrupted banking systems ...These conditions can have a negative impact to the stability ofnational banking" in Indonesia, she said.
More favorable lending terms at the central bank will remain inplace for as long as necessary to ensure liquidity, she said.
The market was closed Wednesday amid a freefall that drove downthe index 21 percent last week amid panic that the U.S. financialcrisis could trigger a global recession.
Responding to the turmoil, Indonesian authorities announcedinitial measures last week to secure capital flows, including easingregulations for share buybacks and corporate financial reservelimits.
President Susilo Bambang Yudhoyono urged state companies torepurchase shares, doubling to 20 percent a buying limit andscrapping compulsory shareholder approval.
Most Asian markets recovered from record loses last week,seemingly encouraged by government guarantees of bank transfers inEurope.
But the Indonesian measures didn't seem to be having the desiredeffect, and commodities stocks, banks and mining companies were downsharply Monday.
Leaders in Indonesia, which suffered a devastating financialmeltdown in the 1997-1998 Asian financial crisis, have sought toreassure investors that the country's fundamental economy remainsstrong
The benchmark JSX index dropped more than 6 percent in theopening half-hour, the first trading since Wednesday when a 10percent drop prompted authorities to suspend trading mid-session.
The index later swung to a profit and was up 0.5 percent at1,458.18 points.
Finance Minister Sri Mulyani Indrawati said the government wouldguarantee private savings of up to US$210,000 (2 billion rupiah) andmake it easier for banks to obtain short-term loans from the centralbank.
"The global financial crisis has disrupted banking systems ...These conditions can have a negative impact to the stability ofnational banking" in Indonesia, she said.
More favorable lending terms at the central bank will remain inplace for as long as necessary to ensure liquidity, she said.
The market was closed Wednesday amid a freefall that drove downthe index 21 percent last week amid panic that the U.S. financialcrisis could trigger a global recession.
Responding to the turmoil, Indonesian authorities announcedinitial measures last week to secure capital flows, including easingregulations for share buybacks and corporate financial reservelimits.
President Susilo Bambang Yudhoyono urged state companies torepurchase shares, doubling to 20 percent a buying limit andscrapping compulsory shareholder approval.
Most Asian markets recovered from record loses last week,seemingly encouraged by government guarantees of bank transfers inEurope.
But the Indonesian measures didn't seem to be having the desiredeffect, and commodities stocks, banks and mining companies were downsharply Monday.
Leaders in Indonesia, which suffered a devastating financialmeltdown in the 1997-1998 Asian financial crisis, have sought toreassure investors that the country's fundamental economy remainsstrong
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