OJK Says Financial Services Stability Maintained Amid Rising Global Inflation

The Financial Services Authority (OJK) assesses that stability in the financial services sector has been maintained amid rising global inflation and financial market volatility. This was conveyed by the Chairman of the OJK Board of Commissioners, Friderica Widyasari Dewi, whilst presenting the results of the OJK Monthly Board of Commissioners Meeting for May 2026 online on Friday (5/6). Friderica explained that the continuing geopolitical conflict in the Middle East region has caused energy prices to remain high and increased global inflationary pressures. This condition reinforces expectations of higher global interest rates for longer, or ‘higher for longer’, thus driving up government bond yields in various countries. “Amidst these conditions, the global economy is still showing resilience. Global manufacturing activity remains in the expansionary zone, albeit at a moderated pace,” said Friderica. In the United States, she continued, the economy is relatively resilient with a still-strong labour market. However, inflationary pressures are beginning to affect consumer confidence. Meanwhile in China, economic growth momentum tends to weaken, with domestic demand and investment still depressed, although export performance is relatively maintained. “These developments increase uncertainty over the direction of global monetary policy and financial market volatility, especially regarding capital flows to developing countries, including Indonesia,” she said. Domestically, Friderica stated that economic activity is showing varied developments. From the supply side, the manufacturing sector’s performance returned to expansionary territory in the period of May 2026. From the demand side, domestic economic activity is relatively maintained. She mentioned that inflation increased in May 2026 in line with global energy price pressures but remains at a manageable level. The trade balance also still recorded a surplus, although it declined compared to the previous period.