JAKARTA - Minister of Finance (Menkeu) Sri Mulyani Indrawati revealed that Indonesia's Financial System Stability (SSK) in the first quarter of 2025 was maintained amid increasing economic uncertainty and the global financial market.
"The situation of the financial system, namely financial system stability in the first quarter of 2025, is maintained amidst the increasing uncertainty in the global economy and financial markets," he said in a virtual KSSK press conference, Thursday, April 24.
According to him, the increasing uncertainty was mainly triggered by the dynamics of the resipprocal tariff implemented by the President of the United States (US) Donald Trump, which led to an escalation of the trade war.
Sri Mulyani explained, entering the beginning of the second quarter of 2025, her party admitted that they would continue to observe and anticipate in the future because global risks remain high.
For information, the Financial System Stability Committee (KSSK) consisting of the Ministry of Finance, Bank Indonesia (BI), the Financial Services Authority (OJK) and the Deposit Insurance Corporation (LPS) has held a second periodic meeting for 2025 which was held on Thursday, April 17, 2025.
"The meeting agreed to continue to increase vigilance and strengthen coordination and policies from KSSK member institutions in an effort to mitigate the potential impact of global risk factors and at the same time increase efforts to strengthen the domestic economy and financial sector," he said.
Sri Mulyani added, in the first quarter of 2025, global economic uncertainty increased driven by the US government's import tariff policy which caused a tariff war and is expected to have a negative impact on economic growth in both the US economy, China's economy and the global economy.
According to him, this has triggered an increase in global financial market uncertainty and uncertainty in trade governance and investment between countries.
Sri Mulyani added that the uncertainty that has occurred has driven risk avoidance behavior (risk aversion) from business actors, including capital owners, leading to a decrease in yields (yield) of the US Treasury and a weakening of the US dollar exchange rate index (DXY) and this situation is taking place amid increasing expectations of lowering the Federal Reserve (Fed Fund Rate/FFR) benchmark interest rate.
He added that global capital flows also experienced a shift from the United States to countries and assets deemed safe (safe haven), especially financial assets in Europe and Japan, as well as gold commodities.
Meanwhile, he said that capital outflows occur from developing countries, causing pressure on the weakening of currencies in various developing countries.
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