Luhut Discusses Capital Market and Financial Reforms with OJK Officials
Jakarta (ANTARA) - The Chairman of the National Economic Council (DEN), Luhut Binsar Pandjaitan, has discussed the strengthening of capital market reforms and the mitigation of vulnerabilities within the financial sector alongside the leadership of the Financial Services Authority (OJK).
In a written statement in Jakarta on Monday, Luhut noted that the reform policies announced by the OJK are currently on the right track. However, the government has also identified significant challenges, specifically regarding doubts from market participants, particularly foreign institutional investors, concerning the consistency and speed of reform execution on the ground.
“This is a momentum that must not be missed to conduct comprehensive and credible capital market reforms. The DEN will fully support the OJK in overseeing this process,” said Luhut.
According to Luhut, if implementation is maintained consistently, foreign capital inflows will return, directly strengthening the fundamental value of the rupiah. Regarding the condition of the national banking sector, Luhut added that the government considers the current macro situation to be relatively stable.
Nevertheless, the DEN emphasised the importance of maintaining a balance between providing financing support for the government’s priority programmes and enforcing good corporate governance alongside strict risk management. The OJK is also being encouraged to continue producing policy innovations, particularly in the aspect of financial deepening, to ensure the industrial ecosystem remains healthy and capable of providing maximum support for national economic financing.
The government also highlighted the need for firm risk mitigation within the Rural Bank (BPR) sector. The DEN noted a significant upward trend in the Non-Performing Loan (NPL) ratio. While acknowledging that the OJK has taken strategic steps, the DEN believes that the restructuring and institutional strengthening of BPRs must be conducted more comprehensively as an anticipatory measure.
Luhut also stated that the DEN and OJK have agreed to establish a closer coordination mechanism to monitor developments in the rupiah exchange rate, financial market conditions, and investor perception on a regular basis.
“Amidst high global and domestic pressures, coordination is key. Regular meetings between the DEN and OJK will be standardised as a forum to exchange views and formulate responsive policies to maintain the stability of the national financial system,” he concluded.