Bank Indonesia reaffirms commitment to maintaining stability at IMF-World Bank meeting
Bank Indonesia (BI) has reaffirmed its commitment to maintaining macroeconomic stability and the financial system amid global uncertainties at the Spring Meetings of the International Monetary Fund and World Bank (IMF–World Bank Spring Meetings) in the United States.
Perry, in a written statement received in Jakarta on Saturday, stated that this commitment is pursued through flexible yet measured exchange rate management, strengthening monetary instruments to maintain the attractiveness of domestic assets, and cautious liquidity management to continue supporting growth.
Additionally, close synergy with the government is maintained to uphold fiscal discipline, including a commitment to keeping the deficit below 3 per cent of gross domestic product (GDP) and reallocating expenditure to productive sectors.
In the medium term, Perry continued, Indonesia continues to promote the direction of structural transformation towards higher value-added economic sectors through downstreaming and the development of technology-based sectors to drive sustainable economic growth.
This reaffirmation of commitment serves as a response to the IMF’s spotlight on the importance of authorities focusing on strategic measures to maintain stability amid global uncertainties while ensuring economic transformation benefits growth.
The IMF conveyed the view that the global economy remains resilient, although faced with increasingly complex uncertainties, particularly due to the war in the Middle East.
On the other hand, major changes in technology, demographics, and the environment are also creating new challenges as well as opportunities.
These changes include artificial intelligence (AI), which has the potential for productivity and welfare, while also causing disruptions in various sectors alongside the rapid development of that technology.
The strategic steps recommended emphasise guarding inflation expectations by ensuring clear policy communication to support the effectiveness of monetary policy, maintaining financial stability through strengthened supervision and banking regulation, and preserving the credibility of fiscal policy amid increasingly limited fiscal space.
Additionally, countries are urged to promote structural reforms, strengthen energy resilience through diversification and the utilisation of renewable energy, and enhance international cooperation.
The IMF also highlighted the need for collective efforts to strengthen the global financial safety net to bolster collective resilience through assistance to member countries in need, as well as increasing the IMF’s capacity in carrying out surveillance, financing, and providing relevant technical assistance to member countries.
Thus, at that meeting, finance ministers and central bank governors agreed on the Global Policy Agenda as a collective step to manage pressures and transformations.