BUKITTINGGI - Bank Indonesia (BI) expressed its vigilance against the potential impact of the United States (US) government policy which temporarily suspended government operations or known as government shutdown.
Director of the BI's Department of Economic Policy and Monetary Budi Winantya explained that the shutdown policy that occurred in the midst of global conditions full of uncertainty has the potential to have an impact not only on the US economy, but also on Indonesia.
"The impact will be transmitted to the global financial market, including to Indonesia through exchange rates and other instruments," he said during a training of BI journalists, Friday, October 24.
He said the cessation of US administration operations could worsen the country's budget deficit, which ultimately affected the expectations of yields, unemployment rates, and market participants' perceptions.
According to him, if the unemployment rate in the US increases, the Federal Reserve (The Fed) will usually respond to this condition through the policy of increasing the benchmark interest rate (Fed Funds Rate).
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He added that this adjustment to monetary policy would affect market sentiment, capital flow, and lead to increased exchange rate volatility and global investment instrument prices.
"So the uncertainty could arise from the fiscal condition of the US, but the response to US monetary policy also affected," he said.
For information, the US government has officially implemented a government shutdown policy since October 1, 2025.
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