'We all know that this morning [US central bank] Governor Ben Bernanke has discussed the possible halt of quantitative easing. We must be cautious because this will affect financial markets all over the world. So, don't be surprised if there are repercussions in the capital market here,' Finance Minister Chatib Basri said Thursday in Jakarta.

The Federal Reserve, US central bank, held its board of governors meeting on Wednesday (Thursday, Jakarta time), determining the fate of the monthly US$85 billion of bond-buying program, commonly known as quantitative easing,  which has flushed liquidity towards emerging economies, including Indonesia.

In a much-anticipated speech after the meeting, Governor Bernanke said that he would 'moderate the pace of [bond] purchases later this year' if the continual improvement in US unemployment and growth data remained consistent. The Fed might eventually end the bond purchase program in mid-2014, he added.

'Capital will stream out of the emerging markets to developed countries, eventually leading to tighter liquidity, which will affect our investments,' Chatib said, regarding the possible halt of quantitative easing, adding that he already held a meeting with Bank Indonesia (BI) Governor Agus Martowardojo this morning to specifically address the issue.

Indonesia has recently witnessed huge sell-off in its bonds and equity markets, a situation that has put pressure on its currency.

The rupiah fell 0.17 percent to touch 9,927 per US dollar on Thursday, according to the Jakarta Interbank Spot Dollar Rate (JISDOR). The Jakarta Composite Index (JCI) tumbled 2.9 percent to hit 4667.9 at the closing of midday trading session.

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