Policy mix to maintain Indonesia’s economic stability

Jakarta (Indonesia Window) – The policy mix is believed to be a strategy in maintaining stability and economic growth in Indonesia.

“After the global financial crisis since 2010, Indonesia has adopted a policy mix that combines monetary policy and prudential macro policy to maintain national economic stability and growth,” Bank Indonesia Governor Perry Warjiyo said at a public lecture held at the University of Sydney, Australia, on Thursday (10/10).

A statement from the Indonesian Consulate General in Sydney received in Jakarta on Friday said the public lecture was themed “Central Bank Policy Mix: A New Paradigm and Indonesia Experience.”

According to Perry, the integrated policy framework has become a trend and is taken into account by central banks from other countries.

He underlined that the merger is good for Indonesia which implements an open economy in anticipation of uncertainties and risks due to the interrelated global financial systems.

Through this policy, Bank Indonesia coordinates with the government to maintain macroeconomic stability, prices of goods, assets, and economic growth, Perry said.

“The role of the Central Bank to maintain economic stability through monetary policy is not enough. The Central Bank also needs to play a role in maintaining financial stability because when a crisis occurs, the volatility of the financial sector is even greater,” Perry added.

The material presented by Perry is sourced from a book written by the Head of the Bank Indonesia Institute, Solikin M. Juhro, which was launched in the English version in 2019 under the title “Central Bank Policy: Theory and Practice”.

The public lecture was moderated by the Assistant Governor for Economic Affairs at the Reserve Bank of Australia Dr. Luci Ellis and was attended by around 150 people from academia and financial practitioners in Sydney.

Professor Mariano Kulish from University of Sydney’s School of Economy appreciated Perry’s presence in Sydney as a reflection of the close relations between the central banks of Indonesia and Australia.

Indonesian Consul General in Sydney Heru Hartanto Subolo and the Indonesian Economy Consul in Sydney Silvia Malau were also present at the event.

Reporting by Indonesia Window