Banks, Markets Prepare for Idul Fitri Holiday
Jakarta. Indonesian banks, bonds and stock market will close for five days from Thursday to Monday as Bank Indonesia stops its settlement operations for the Idul Fitri.
Bank Indonesia, the country’s central bank, will stop its real-time gross settlement system — which caters to large transactions above Rp 100 million ($7,500) between banks — between July 16 and 20, the central bank said in a statement. The central bank will also close the script-less securities settlement system during the holiday period.
Bank Indonesia’s will also cease open market operation — in which it buys and sells government bonds and foreign currencies — during the period.
Bank Indonesia will be back with a limited service on Tuesday, July 21, providing only cash for Indonesian lenders and operating its rupiah deposit and lending facilities.
The central bank is set to return to full operation on Wednesday, July 22, with 60 minutes extended services period for the real-time gross settlement and script-less securities settlement systems.
Cash demand
Indonesian banks will continue providing services for its customer through 24 hour ATM machines, for withdrawing cash, transferring money, paying bills and other services. The lenders will also maintain operation of their online services.
Bank Indonesia estimated Indonesians will need cash of around Rp 119 trillion to Rp 125 trillion during Ramadan and the Idul Fitri celebration this year, compared to last year’s Rp 125 trillion, in order to met demand of people who come to their hometowns.
Some 20 million Indonesians are expected to travel around Idul Fitri this year, up 2.5 percent from last year, according to data from the Transport Ministry. They would need cash for retail transactions in the regions, which remain lack of card-based payment system.
Still, the customers could rest assured on cash availability as the country’s largest lenders come loaded with their preparation. Bank Mandiri, the biggest state-owned lender by assets, had prepared Rp 36 trillion during the period. Its closest rival Bank Rakyat Indonesia had prepared Rp 27.6 trillion ready in its 21,000 automated teller machines and operation units across the country.
State owned Bank Negara Indonesia, a state-owned lender, readied Rp 60 trillion in its 14,171 ATMs across the country. Meanwhile, Indonesia’s biggest private-owned lender by assets, Bank Central Asia, had prepared Rp 50 trillion, up 5 percent from last year’s Idul Fitri preparation or Rp 48 trillion.
Holiday mode
At the Indonesia Stock Exchange, traders seem to have taken a laidback approach ahead of the holiday. The Indonesia Stock Exchange (IDX) will close trading between Thursday and next Tuesday.
Satrio Utomo, a stock analyst at Universal Broker, said most local investors would reduce their trade this week, having closed their major positions last Friday.
“Majority of investors has taken into account that [cash settlement from Friday transactions would be done] Wednesday. So, selling pressure has declined and there is sign of rebound,” Satrio said.
Indonesia’s main stock gauge climbed by 0.72 percent to 4,893.92 on Monday. Approximately 3.5 billion shares — valued at roughly Rp 3.56 trillion — changed hands on the local bourse on Monday, which is about 43 percent lower than the daily average trading of about 6.2 billion shares, worth Rp 6.2 trillion.
Foreign investors accounted for 44 percent of the trade, selling Rp 110 billion more than they bought, data from IDX showed.
Universal’s Satrio said that traders would make a move on any sign of economic improvements when Bank Indonesia announce its benchmark rate on Tuesday and the Central Statistics Agency report June’s trade balance on Wednesday.
Hans Kwee, a director at investment consultant firm Investa Saran Mandiri said that the stock market is predicted will be relatively quiet towards the holiday season.
Some of the traders who remain on the market on Monday seek to capitalize on “euphoria from Greece and China,” Hans said.
Leaders of the European Union countries have agreed on a third bailout for Greece, giving an option for the Mediterranean country to stay in the Eurozone. Meanwhile, Chinese shares continued to climb again on Monday as companies resumed trading, coupled with the Chinese government’s intervention.
The latest developments have decreased uncertainty in global market and boosted investors appetite for buying stocks, Hans said.
GlobeAsia
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