Sumber: Istimewa
CURRENTLY, public finance stands on what can only be described as a “fiscal cliff’s edge.” A deficit of 2.92%, a mere 0.08% shy of the statutory ceiling, flashes a warning signal that cannot be dismissed. State revenues are thinning. Dividends from state-owned enterprises, now funneled through Danantara, no longer feed the national budget. Meanwhile, populist spending continues to pour unchecked. On the global stage, escalating tensions between the US–Israel and Iran cast a shadow over the Strait of Hormuz, the artery of 20% of the world’s oil trade. Geopolitics has evolved into a force of profound uncertainty.
So, what must the banking sector do?
First, banks must confront liquidity risk with clear-eyed realism. Third-party funds (DPK) may appear formidable at Rp9,217 trillion, yet undisbursed loans have surged to Rp2,509 trillion. This reveals a real sector frozen in hesitation. Selectivity in credit allocation is no longer a choice, it is a necessity.
Second, brace for monetary pressure. The rupiah’s breach of Rp17,000 per US dollar stands as a stark alarm. Bank Indonesia will defend stability through a tight interest rate stance. Banks must prepare for escalating funding costs. Resist the temptation of deposit rate wars that inevitably erode margins.
Third, recognize the fiscal strain bearing down on customers. Every US$1 rise in oil prices pushes Pertalite up by Rp111 per liter and diesel by Rp115 per liter. Seasonal inflation has already reached 2.92%, and any surge in energy prices will further erode purchasing power. The consumer segment, mortgages, auto loans, multipurpose financing, has begun to slow, with consumer NPLs at 2.74%. Banks must sharpen their scrutiny of borrowers’ repayment capacity, particularly in sectors exposed to energy price volatility.
But remember, cash is king does not imply inertia. This is a defensive posture, not a passive retreat. Banks must continue lending but with precision. Avoid sectors vulnerable to energy shocks and weakening purchasing power.
Do not wait until fiscal reality plunges into the abyss. Do not wait until global conflict incinerates optimism. At a moment when fiscal conditions resemble a figure walking along a precipice with half-closed eyes, an old and often underestimated principle emerges as the ultimate safeguard. Beyond the three measures above, one doctrine stands supreme: cash is king. Is it still relevant? It is precisely now that its relevance reaches its zenith.
Why does cash reign supreme?
First, cash delivers endurance. In the 1998 crisis, survival did not belong to the largest banks, but to the most liquid. Those suffocated by bad loans collapsed. Those fortified with strong cash reserves endured. Today, as default risks rise across MSME and consumer sectors, banks must guard liquidity ratios as they would their very lifeblood.
Second, cash grants strategic flexibility. In a scenario where US– Israel versus Iran tensions propel oil prices toward US$100 per barrel, far beyond the state budget assumption of US$70, energy subsidies will fracture. Inflation will surge. Purchasing power will erode.
Third, cash becomes ammunition when the gates of crisis swing open. As system liquidity tightens and this risk looms if foreign outflows persist (Rp8.7 trillion in equities and Rp14.4 trillion in bonds have already fled) the central bank may tighten policy further. Interest rates will climb. Funds will grow increasingly costly. Banks with abundant cash will not be forced into aggressive competition for expensive funding.
But remember, cash is king does not imply inertia. This is a defensive posture, not a passive retreat. Banks must continue lending but with precision. Avoid sectors vulnerable to energy shocks and weakening purchasing power. Above all, fortify risk management. Monitor NPLs daily, not monthly.
Thus, the conclusion is unequivocal: cash remains king. In times of stability, the crown may be set aside. But in moments of crisis, it is cash that commands control. Do not allow the banking sector to be seduced by the illusion of abundant liquidity. For when the storm truly strikes, those with cash will endure, while those without will be swept away.
And for customers, the same doctrine holds true. Amid fiscal strain and global volatility, resist the urge to rush into high-risk assets. Hold cash. Safeguard liquidity. Wait for clarity to emerge. Because in times of conflict, survival does not belong to the strongest, but to the most prepared.
Cash is king. Never forget it.
So, what must the banking sector do?
