JAKARTA - The Financial Services Authority (OJK) considers that the stability of the national financial services sector is maintained even though it is in the midst of the dynamics of global geopolitical trade and tension.
Chairman of the OJK Board of Commissioners Mahendra Siregar said that the dynamics of international trade showed positive developments, among others, through the achievement of a permanent trade agreement between the United States (US) and Britain.
According to him, this is the first permanent agreement between the US and other countries since the postponement of the application of the reciprocal rate.
"The provisional trade agreement between the US and China on May 12, 2025, which is valid for 90 days, has also reduced global trade tension," Mahendra said at the RDK Press Conference, Monday, June 2.
Mahendra said market participants welcomed the agreement so as to encourage the strengthening of the global financial market, followed by a decline in financial market volatility and capital inflows to developing countries.
He added that although geopolitical tensions have increased in several areas, the impact can still be localized so that its impact on global financial markets is relatively limited.
In addition, at the same time, global economic growth in the first quarter of 2025 weakened, accompanied by a decline in inflation that reflected a decline in global demand.
He conveyed that global monetary policy tends to be more accommodative with several central banks lowering interest rates, injecting liquidity into the market, and even lowering mandatory minimum reserves (reserve requirement). Meanwhile, global fiscal policy is also expansive even with limited space.
Mahendra explained that The Federal Reserve (The Fed) gave a signal that it would maintain the Fed Fund Rate (FFR) at a higher level in the longer term while waiting for confirmation of the tariff policy and its impact on the US economy.
According to him, this has caused the market to reduce the projected cutting of FFR from three to four times to two in 2025, with the first cuts expected to be pushed back to September 2025.
In addition, Mahendra mentioned that the market is also watching the impact of President Donald Trump's One Big Beautiful Bill, which is expected to increase the US fiscal deficit, bringing Moody's down the US credit rating, which has an impact on weakening the bond market and the US dollar exchange rate.
Meanwhile, he said that the domestic economy was still showing resilience, although Indonesia's economic growth in the first quarter of 2025 slowed to 4.87 percent, domestic demand, especially household consumption, remained the main motor of growth with an increase of 4.89 percent.
In addition, Inflation is also maintained at 1.95 percent still within the target range of Bank Indonesia (BI).
SEE ALSO:
"The trade balance is also still recorded as a surplus, the current account deficit is narrowed to 005 percent from GDP from the previous 0.87 percent, and foreign exchange reserves remain stable at a high level," he added.
Furthermore, Mahendra reminded that the global economic slowdown, relatively high global interest rates, as well as the process of negotiating the US trade with its main partners, need to be observed because it has the potential to affect the performance of debtors and the financial services sector in Indonesia.
Therefore, Mahendra requested that financial service institutions need to continue to carry out comprehensive assessments so that in the future they can take the necessary mitigation steps.
"On the other hand, OJK continues to improve policies to deepen financial markets in synergy with relevant ministries and stakeholders in order to improve competitiveness and maintain the performance of the financial services sector to grow sustainably," he concluded.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
