Finance Minister Purbaya: Indonesia's Economic Foundation Remains Strong Amidst JCI Decline
Finance Minister Purbaya Yudhi Sadewa emphasised that the government is focused on maintaining the nation’s economic foundations to ensure growth remains uninterrupted amidst the weakening of the Jakarta Composite Index (JCI) during Monday’s trading.
According to the Minister, Indonesia’s current economic fundamentals are robust, and the recent capital market performance is driven by short-term market sentiment. Consequently, he remains optimistic that the JCI can recover.
“It is fine; we will rectify it. The economic foundation is good. This is merely a short-term sentiment issue. Therefore, I will focus on guarding the economic foundation by ensuring economic development is not disrupted,” Purbaya stated at Halim Perdanakusuma Air Force Base, Jakarta, on Monday.
He noted that the government, through the Himbara (State-Owned Banks) group, has entered the bond market to prevent further market volatility. The Finance Minister assured that government intervention would provide a significant, gradual improvement. He believes this strategy will assist in stabilising the rupiah’s movement.
“Starting today, we will enter more significantly so that the bond market remains controlled, ensuring that foreign bondholders do not exit due to fears of capital losses resulting from falling bond prices. This can currently assist in supporting the rupiah’s movement,” said Purbaya.
The JCI on the Indonesia Stock Exchange (IDX) weakened on Monday, driven by market concerns regarding a high-interest-rate era caused by uncertainties surrounding the conflict between the United States and Iran, which has led to rising crude oil prices.
The JCI opened lower by 94.34 points, or 1.40 per cent, to 6,628.98. Meanwhile, the LQ45 index, comprising 45 blue-chip stocks, fell by 9.37 points, or 1.42 per cent, to 648.51. By the close of the first session, the JCI had dropped as much as 320.76 points, or 4.77 per cent, to 6,402.56 during trading at 11:04 WIB.