Gov’t Closely Monitoring Global Financial Market Amidst Covid-19 Outbreak: Sri Mulyani

Minister of Finance answers reporters’ questions after attending a limited meeting at the President’s Office, Jakarta, Monday (9/3). (Photo by: Jay/PR)

Volatility caused by the current global financial market is bound to affect Indonesia’s policies, Minister of Finance Sri Mulyani Indrawati said.

“The Government – together with central bank Bank Indonesia and the Financial Services Authority (OJK) –  will continue to pay close attention to these global dynamics,” the Minister told reporters after attending a limited meeting at the Presidential Office, Jakarta, Monday (9/3).

According to her, volatility in the financial market is affecting the country’s financial sector, be it banks or non-banks. Therefore, it is important to scrutinize whether the volatility is temporary or will bring a long-term impact in the long run.

What the Government can do now is mitigating the impacts so as to not affect the fundamentals of corporations including the financial sectors, she said.

Regarding economic impacts of the spread of Covid-19, Sri Mulyani noted that stock price index in major global stock exchange such as Dow Jones dropped due to internal issues and the handling of covid-19 outbreak, which led to a drop in Indonesia’s price index this morning.

“If we look at London’s FTSE, it has now dropped by 6 percent as well. This illustrates that the world financial markets is experiencing uncertainty and volatility,” the Minister said.

One of the solutions, according to the Minister, is to seek instruments that are deemed safe, including by buying back government bonds.

“In the US, for example, in the course of ten years, the yield has never dropped below 1 percent. This is the lowest in record history. This means they are looking for instruments that are deemed safe,” Sri Mulyani said.

Commenting on premium of the Health Care and Social Security Agency (BPJS Kesehatan), Sri Mulyani said that the Government has no choice but to annul the recent premium hike after the Supreme Court on Monday (9/3) voided a government-mandated increase in BPJS Kesehatan premiums that had been in effect since January.

“We will see how BPJS Kesehatan can provide health services to the public,” the Minister said, adding that as of the end of December last year, the agency still reported a financial deficit despite the Government’s injection worth Rp15 trillion. (FID/EN)

Translator: Muhardi

Reviewed by: M. Ersan Pamungkas