Jakarta, April 6 -- The Financial Services Authority (OJK) acknowledged an insignificant impact of the Middle East conflict on the capital and liquidity of Indonesian banks, as exposure to non-resident parties in the region is quite small.

"The direct impact of the Middle East conflict on Indonesian banks is relatively limited," Dian Ediana Rae, chief executive of banking supervision at the OJK, said here on Monday.

However, considering Indonesia is an open economy, he emphasized the need to closely monitor global developments-particularly in light of the ongoing war involving the US, Israel, and Iran, which have impacted geopolitical and geoeconomic conditions.

If the war escalates for a long time, he continued, this condition may bec...