GOVT SETS UP EXPORT FINANCING INSTITUTE (INDONESIA EXIM BANK)

Jakarta, June 17 (ANTARA) - The government has made a new breakthrough in its efforts to boost exports by establishing an Indonesia Export Financing Institute (LPEI) or Indonesia Eximbank, an official said.

Fuad Rachmany, head of the Capital Market Supervisory Board and Financial Institution (Bapepam-LK), said here on Wednesday that Indonesia really needed a special institution which handled exports.

He said that Indonesia Eximbank had certain advantages compared with other banks. Indonesia Eximbank could provide financing for transactions or projects which could not be financed by banks due to certain reasons such as political risks.

Besides, he said, Eximbank (LPEI) is not bound to banks regulations because it has been regulated by the government through a separate law.

The LPEI has been set up in order to break through the barriers of the business world, including political risks, that could not be penetrated by commercial banks.

He said that the LPEI was regulated in a separate law, namely Law No. 2 / 2009.

"The LPEI is set up not intended as a competitor for commercial banks but it is expected to fill the gap which could not be filled in by commercial banks," he said.

Rachmany said that although it was no longer under the supervision of Bank Indonesia (BI/the central bank), yet LPEI remained to need the support of the central bank.

"LPEI needs the support of BI because it will remain to be active in the inter-bank money market (PUBA) although its status is no longer a bank," the Bapepam-LK chief said.

In the meantime, BI deputy governor Muliaman D Hadad said with the change in the status of Bank Expor Indonesia (BEI) into a LPEI based on Law No.2 / 2009, the BEI was no longer under the supervision of the central bank.

"This is a progressive step. We hope that with becoming a non-bank financial institution BEI would be able to carry out its vision and mission. We also hope it could pass its transitional period well," Hadad said.***2***