Strengthening Fiscal-Monetary Coordination: Indonesia's Path Forward

Enhancing Economic Policy Synergy

Finance Minister Purbaya Yudhi Sadewa emphasized that the revision of the Financial Sector Development and Strengthening Law (UU P2SK) represents a critical opportunity to enhance coordination between fiscal and monetary authorities. The proposed changes aim to create a more cohesive national economic policy framework that can effectively respond to both domestic and international economic pressures.

Key Improvements in the Revised Law

The revised UU P2SK is expected to strengthen the coordination among key financial authorities including Bank Indonesia (BI), the Financial Services Authority (OJK), the Indonesia Deposit Insurance Corporation (LPS), and the Ministry of Finance. This enhanced collaboration is designed to create more responsive and effective economic policies.

Minister's Perspective on Regulatory Changes

Purbaya highlighted that the current regulatory framework needs adjustment to better align the roles of various financial authorities. He humorously noted the previous reporting structure where LPS reported to the Ministry of Finance, saying, "LPS used to report to us, now they report directly to DPR. I lost out," illustrating the need for better coordination mechanisms.

Implications for Indonesia's Financial Sector

The revision of UU P2SK is expected to have significant implications for Indonesia's financial sector by creating a more harmonized regulatory environment. This change is particularly important as the country navigates complex global economic conditions while maintaining domestic financial stability.