JAKARTA, KOMPAS.com — The deputy governor of Bank Indonesia, Budi Mulya, advises the market not to over-react to the Dubai World case. According to him, the Dubai World case won't have a significant effect on the Indonesian market.
"Please do not overreact because this case is not default. Compared to Lehman Brothers, this is different. For the Lehman case it was a systemic risk, and the underlined cause was unclear derivatives. But for Dubai World the cause is clear. It was caused by the plummeting property price so that the credits encounter problems," said Budi to journalists, Monday, at the Commission XI of the Indonesian House of Representatives, Jakarta.
He added that the investors reactions so far are still normal. "All authorities, whether in Asia, Europe, and Middle-East, are alert. All have prepared themselves to mitigate any possibility of negative effects."
Dubai World, a kind of state-owned enterprise in Dubai, has proposed a standstill or a delay on its debts that amounts to 60 billion USD for the next six months. (Hindra Liu/C17-09)
