Banking consolidation, which began since the launch of Pillar I of API, has reached its final stage of preparation, the stage where some banks have determined their strategic future direction. As we are all aware, 2008 is the year when all commercial banks must maintain a minimum capital requirement of Rp80 billion to uphold its status as a fully-operational commercial bank.
We view the current monetary policy settings as providing stimulus to the economy at a time when output looks to be growing around 2.5 percent, slightly below potential 7, and core inflation remains a bit below the mid-point.