Banking and Finance

Banking Triggers Second-Round Crisis

VIVAnews - Finance Minister Sri Mulyani Indrawati predicted that the second-round crisis will appear from banking sector. It is indicated by delays in liabilities repayment by companies to banks.

"There is a chance that a second-round crisis will appear from banks due to non-performing loans of the real sector. Loss announcement is still undergoing," said Finance Minister Sri Mulyani on Wednesday, March 4.

The situation occurs by virtue of the fall in world's economy which may touch zero percent compared to the previous projection of 2.5 percent.

Given the plunging growth within the last three months, said Mulyani, world trading decreases sharply. Exports and imports fell pointedly. "This is [our] concern. All companies will be affected. Companies are however having difficulties in repaying debts," said Finance Minister. It is figured that the situation will lead to a second-round crisis.

Other effects include the decreased volume of capital. The amount of capital contributed to the emerging market is normally above US$600 billion. However, it only amounts US$160 billion recently. "The fast and drastic capital decrease will affect the economy. The crisis has affected exports, imports and capital. It has lowered growth," she said.

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Translated by: Bonardo Maulana Wahono

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VIVA.co.id
20 April 2024