Govt urges calm, cites solid fundamentals amid market pressures

Jakarta (ANTARA) - The Indonesian government has urged public calm and a focus on core economic fundamentals following recent capital market volatility and discussions surrounding rupiah exchange rate dynamics.

Speaking in Jakarta on Thursday (November 5), Deputy Coordinating Minister for Economic Affairs Dradjad Hari Wibowo emphasized that while market fluctuations require attention, responses must remain measured and grounded in broader economic realities.

"During a plenary cabinet meeting, the President stressed that we must implement fundamental improvements to our capital market," Dradjad stated.

The government's reform push focuses on enhancing transparency and corporate governance, specifically targeting stock manipulation practices locally known as “stock frying” or goreng-gorengan.

The initiative comes in the wake of global index provider MSCI's consideration of reclassifying Indonesia from an "emerging market" to a "standalone market.”

While acknowledging the need for structural upgrades, Dradjad urged objective evaluations, noting that other index providers have maintained Indonesia's status.

"If you look at it rationally - without panicking - then, naturally, things will not be too shaken," he said.

To boost investor protection and transparency, authorities are advancing rules requiring the disclosure of shareholders holding stakes exceeding 1 percent.

Dradjad also advised retail investors against panic-driven trading, recommending a focus on long-term corporate fundamentals.

Furthermore, he highlighted the vital oversight role of the Financial Services Authority (OJK) in enforcing regulations and expanding financial literacy.

Addressing currency fluctuations, Dradjad advised viewing the rupiah through a comprehensive macroeconomic lens, pointing out that past extreme forecasts - such as predictions of the currency weakening to Rp20,000 per US dollar by October 2025 and Rp25,000 by mid-2026 - did not materialize.

To safeguard external resilience, the government is prioritizing the reinforcement of key foreign exchange sources, including tourism revenues and remittances from Indonesian migrant workers.

Additionally, economic authorities are closely tracking shifting consumer behavior, marked by a structural migration from physical retail to digital and online platforms across various product segments.

Related news: Indonesia's capital market exceeds standalone standards: OJK

Related news: Bank Indonesia says rupiah remains manageable after MSCI market shock

Translator: Bayu Saputra, Yashinta Difa
Editor: Primayanti
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