OJK Boss: The Stability Of Indonesian Financial Services Is Maintained Amid The Heat Of Geopolitical Tennision

JAKARTA - Chairman of the Board of Commissioners (DK) of the Financial Services Authority (OJK) Mahendra Siregar said that the stability of the national financial services sector is maintained strongly supported by solid capital and adequate liquidity.

"The financial services sector is maintained to be supported by strong capital and adequate liquidity, so it is considered capable of facing a continuing decline in world economic growth and a high level of global uncertainty," Mahendra explained in the virtual November 2023 RDK, Monday, December 4.

In addition, Mahendra said that global economic conditions are starting to improve with the inflation rate going to pre-pandemic levels, especially in developed countries.

Meanwhile, sentiment in the financial market also tends to be positively supported by an increase in market expectations that expects the global central bank to reach its highest position on its monetary policy and is expected in the near future to lower its benchmark interest rate.

"The expectation of an end to the cycle of global interest rate hikes is supported by the release of US employment data and the decline in inflation," he explained.

Mahendra expressed that optimism was also influenced by fiscal, monetary and Chinese financial sector incentives to prevent a decline in China's economic performance, including in overcoming problems in the property sector.

Furthermore, Mahendra said that global geopolitical tensions are still continuing to increase as the Middle East conflict continues and political elections in developed countries that show victory from right-handed political parties.

"However, the impact on rising oil and energy prices seems to be still limited, especially given the continuing trend of weakening demand," he explained.

Mahendra also said that the increase in food prices is expected to subside as El Nino weakens.

Di sisi lain, dengan perkembangan kondisi saat ini mendorong adanya penguatan pasar keuangan global dan penurunan volatility di pasar saham, surat utang maupun nilai tukar.

"Non-resident investors have also begun to enter the financial market from emerging countries including Indonesia, after making significant share-offs in the previous 3 months," he concluded.