House of Representatives Says P2SK Law Strengthens Indonesia's Position as ASEAN Financial Epicentre

Jakarta, CNBC Indonesia – Deputy Speaker of the Indonesian House of Representatives (DPR) Sari Yuliati has said that amid uncertainty, global fragmentation, geoeconomic conflict, supply chain recalibration, and volatility in financial and commodity markets, Indonesia continues to stand firm as one of the economic and financial epicentres of Southeast Asia, or ASEAN.

According to Sari, this resilience stems from fiscal discipline and monetary prudence, as well as the courage of all parties to pursue structural and fundamental reforms.

“One of these was brought forward by the DPR and the government, namely Law Number 4/2026 on the Development and Strengthening of the Financial Sector (P2SK),” Sari said on Wednesday (15/7/2026).

“For us in parliament, the P2SK Law is not merely regulatory renewal; it is the manifestation of a grand vision to recalibrate the engine of Indonesia’s growth,” she added.

Sari added that the P2SK Law strengthens the foundations for deepening the financial market and widens the ‘tap’ of financing access, which has long been a bottleneck for the national economy’s leap forward.

She noted that Indonesia’s financial market has been relatively shallow compared with peer countries in the region. A shallow financial market is highly vulnerable to capital outflows.

“The limited range of investment instruments, the number of buyers and sellers, and transaction volumes make our market illiquid and still dependent on foreign capital. These characteristics make the market vulnerable, especially during global panic or, for instance, when developed countries raise interest rates,” Sari explained.

As a result, when foreign investors flee, Indonesia’s financial market struggles to find local buyers capable of absorbing the large volumes of assets released by foreign investors.

“Because transaction volumes are small, large-scale buying or selling by one or two foreign institutional investors will immediately distort prices significantly,” Sari said.

Furthermore, Sari continued, when foreign funds flee, this situation puts pressure on the rupiah. With the P2SK Law in place, greater stability and deepening of the financial market are expected.

In line with the P2SK Law, the DPR hopes for a coordinated ecosystem among the regulators, namely the Ministry of Finance, Bank Indonesia (BI), the Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS).

“One that is increasingly solid and seamless,” Sari stressed.