The story of Boediono on the IMF's misrepresentation in the face of the 1998 crisis

JAKARTA, KOMPAS.com – In response to the monetary crisis of 1997-1998, Indonesia requested the badistance of the International Monetary Fund (IMF) not only in the form of strategic advice, but also in the form of injections of funds.

The former governor of the Bank of Indonesia, Boediono, revealed that at that time, the IMF was wrong to prescribe to increase the financial liquidity of Indonesia that occurred. suddenly dried up.

The IMF advised Indonesia to close 16 banks controlling 3-4% of domestic bank badets. However, the closure of the 16 banks was done without a security system, which had a psychological impact on the community.

At that time, said Boediono, the system was not yet known global guarantee or a 100% guarantee policy for client funds in banks.

Also read: According to Boediono, it is the positive and negative impact of the trade war for the Republic of Indonesia.

"At that time, the recipe of the first round was wrong, for 16 banks that controlled 3 to 4% of their badets without any security," said Wednesday (11/28/2018) the 11th Indonesian Vice President in Jakarta.

Ha pushed people to withdraw funds from banks because they feared that the bank in which they would save would also be closed. Many of them therefore transfer funds to state-owned banks or even Singapore because they are considered safer.

"The IMF does not think about the impact," he said.

It's only after the incident that the policy has begun global guarantee. "That is, after three months of Indonesian economy hit by banks, we run out of funds and our payment system is not accepted externally," said Boediono.

Impact of the policy global guarantee it only started to be effective in March. Dozens of banks were closed again due to the equity ratio minus tens of percent. However, there was no more impact on the chain as there was no big withdrawal of funds from customers.

Boediono also explained that Indonesia had already faced a crisis in 1960 and 1980. However, it was different from the 1998 era when the crisis was caused by the reversal of foreign funds to the country. ;foreign. While, for the 1960s and 1980s, this was due to the drop in oil prices, which weighed down the state's budget.