President signs 'Perpu' to increase guarantee for depositors

The Jakarta Post, Jakarta 

President Susilo Bambang Yudhoyono has signed two government regulations in lieu of a law (perpu) to provide a better guarantee for depositors amid the worsening global financial crisis. 

The Finance Ministry said in a statement that with the regulations, the government increases the guarantee to cover deposits up to Rp 2 billion (US$204,000). Currently the government only guarantees deposits up to Rp 100 million. 

State Secretary Hatta Rajasa said earlier the President signed the regulation after a series of meetings with related officials on Sunday night and Monday morning at his residence at Cikeas, Bogor. 

The other perpu signed by Yudhoyono eased the requirements for banks to obtain bridging finance from Bank Indonesia. 

Currently, only near-cash debt instruments, such as Bank Indonesia Certificates and government bonds, can be used as collateral for banks to obtain bridging finance. 

With the new regulations, banks can now use their performing loans as collateral. This way banks will have more access to funding to improve liquidity. (rid)