The World Economy Is Soaring, OJK Boss Says The Financial Services Sector Remains Stable

The World Economy Is Soaring, OJK Boss Says The Financial Services Sector Remains Stable

JAKARTA - The Financial Services Authority (OJK) expresses that the stability of the global financial services sector is maintained stable amid positive sentiment due to cuts in the interest rate of central banks in several countries.

Chairman of the Board of Commissioners of the Financial Services Authority (OJK), Mahendra Siregar said that his party is currently still wary of the prospects for world economic activity, which is currently experiencing a weakening as reflected in the decline in economic growth in the majority of major countries.

"Economic growth is indicated to have decreased in the majority of major countries, with the Fed, namely the Central Bank of the United States, reducing the outlook for US economic growth in 2024 and followed by an increase in the unemployment rate and a decrease in inflation," Mahendra explained at the RDK press conference, Tuesday, October 1.

Mahendra explained that China's economic growth has experienced a slowdown in manufacturing activity. This has prompted an increase in the unemployment rate to its highest level in the last 6 months.

"Meanwhile, the pressure on the European economy is also deep, as can be seen from the increasing decline in the growth outlook and inflationary projections. These developments encourage global central banks to start a cycle of aggressive interest rate reduction," he said.

Mahendra explained, The Fed lowered its policy interest rate by agre sifsabesar 50 basis points (bps). Meanwhile, the Central Bank of China has said that it will promise to take a sustainable accommodative policy.

"Among other things, by lowering GWM 50 bps to increase banking liquidity, reduce down payment for housing purchases, and extend support to the property sector for 2 years," he added.

Meanwhile, Europe's central bank and the UK's central bank have started a cycle of accommodative reduction in global monetary policy interest rates to encourage financial market liquidity as reflected in the strengthening of global financial markets in the majority of countries.