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Financial Services Authority urges calm following US interest rate hike
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Financial Services Authority (OJK) chairman Wimboh Santoso. (JP/Zul Trio Anggono)
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inancial Services Authority (OJK) chairman Wimboh Santoso has asked people to stay optimistic amid the recent interest rate hike by the United States Federal Reserve on June 13, as the decision potentially provides opportunities for Indonesia.
Wimboh told reporters during Idul Fitri celebrations at his house on Friday that the hike, which was the second, may signal US economic recovery, thus providing a perfect opportunity for Indonesia to boost exports to the country.
“It [interest hike] is beyond our control, but it doesn't mean we can't minimize the negative impact. We can start by improving efficiency in the financial industry,” he said.
When asked about the possibility of protectionist policies by the US, such as the import tariffs on steel from China, Wimboh urged industry to embrace it with open doors by adjusting to the dynamics of the market.
“We should face it with flexibility in order to stay competitive. It is not only for the financial industry to implement efficiency measures, but also other sectors,” he said.
Bank Indonesia is slated to hold a board of governors meeting on June 27 and 28 to discuss several issues, including its stance over the US interest rate hike.
If the government decides to follow the hike, it will be the third rate hike this year, after the seven-day reverse repo rate was increased to 4.75 percent on May 31, an increase of 25 basis points from the previous rate of 4.5 percent. (dmr)
