In 2010, rupiah strengthened 4.2%, in a range that we view is quite ideal and consistent with the macroeconomic and business environment. 19. Increased economic activity during the course of 2010 was also supported by the performance of banking sector which was reflected in improving intermediation function and stability of the sector.
This was evident from several aspects such as credit expansion which reached 22.8% in 2010, a relatively high capital adequacy ratio (CAR), and a steady low gross non-performing loan (NPL) which was kept under 5%. Overall, resilience of domestic financial market was improving. The escalated debt crisis in Europe which peaked in May and November 2010 only put temporary pressure on the domestic market.