Jakarta, CNBC Indonesia – President Joko Widodo (Jokowi) summoned the Financial System Stability Committee (KSS) to the State Palace, Monday (23/10/2023), to provide an update on the latest situation and developments in the global economy.
This meeting was held amid news of the weakening of the Rupiah against the United States (US) Dollar, where according to Refinitiv, the rupiah had penetrated the psychological level of IDR 15,900/US$ and even in the middle of trading had touched IDR 15,965/US$ or weakened 0.60 %. This position is the weakest since April 8 2020 or around the last 3.5 years.
KSSK members consist of Minister of Finance Sri Mulyani Indrawati, Governor of Bank Indonesia (BI) Perry Warjiyo, Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar, and Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS) Purbaya Yudhi Sadewa.
From CNBC Indonesia’s monitoring, KSSK members started arriving at the Palace complex at 15.00, until the meeting finished at 17.34 WIB.
BI Governor Perry Warjiyo arrived first at 15.00 WIB, followed by Chairman of the OJK Board of Commissioners Mahendra Siregar, and Head of LPS Purbaya Yudhi Sadewa at around 15.20 WIB. Then Sri Mulyani arrived at around 16.17 WIB.
Sri Mulyani arrived late and went straight into the palace for a hasty meeting. Because he had just returned home after carrying out activities in Semarang. “Too late,” said Sri Mulyani.
So what was discussed?
Minister of Finance Sri Mulyani Indrawati together with other KSSK members provided reports on several matters. First regarding updates on the latest global economic situation of the global economy after attending the IMF-World Bank Annual Meeting in Marrakesh, Morocco to the G20.
“To provide an update to the President on the current situation and the situation that continues to develop in the global economy, financial markets and the challenges that we continue to anticipate and must face in the next months and next year,” said Sri Mulyani when giving a press statement, Monday (23/10/2023).
Second, his party also said that coordination of fiscal policy under the Ministry of Finance, namely the APBN and monetary policy through Bank Indonesia, would continue to be synchronized. In order to maintain economic stability and economic growth in the range of 5%, amidst global economic dynamics.
“We know that the dynamics are very high at the moment, with the movement of the dollar getting stronger, very high interest rates in the US and Europe and the weakening of the Chinese economy all providing impacts that we must anticipate,” he said.
According to Sri Mulyani, it is possible that there will be adjustments in the future through existing instruments on the market, as well as in terms of policy communication that will be carried out by the Ministry of Finance together with BI.
Third, the Ministry of Finance will continue to monitor the stability of the financial sector, banking, capital markets, and non-bank financial institutions. Including the movement of incoming capital flows in the form of government securities and shares as well as outgoing capital flows outflow. “If we are experiencing capital withdrawals, especially in response to policies in the US, we continue to be vigilant,” he said.
Later, the KSSK will hold another meeting at the end of the month, where it will examine whether the financial sector has convincing resilience in good conditions.
Fourth, Sri Mulyani also said that inflation conditions would also be maintained in the real sector, and various steps would be taken to safeguard it. Starting from the exchange rate and financial system stability.
“There is adjustments sure, but that is in the context of continuing to maintain stability, to continue economic growth sustainable,” said Sri Mulyani.
For this reason, KSSK is preparing a policy package so that the real sector is maintained, especially the lower middle class, so that their purchasing power is maintained. Although he still doesn’t want to reveal what kind of policy package is being prepared.
“We will see what happened so far, yesterday the governor delivered the results of the RDG and I will also convey the condition of our APBN until mid-October. We are still very good so far so we will continue to synchronize our instruments in the field as well as our communications and policy direction together,” said the former Director of the World Bank.
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Originally posted 2023-10-23 12:52:35.