- SNB’s many interventions would help to restore stability to the banking system. However, such interventions may not be too productive to restore confidence in financial sector, which may translate into a flightto-safety dynamic that could strengthen the USD’s value.
- The decision to expand the central bank liquidity swap operations would help to avoid unwanted strengthening to the USD while also providing a guarantee to USD liquidity that would help to suppress panic in the Eurodollar market.
- A healthy tier 1 capital to risk-weighted assets ratio means that Indonesian banks remain shielded from downturns in asset valuations which may arise due to the flight-to-safety dynamic.
