G20 finance leaders have agreed on realising a well-calibrated, well-planned, well-communicated normalisation in the monetary policy to minimize the impacts of the US Federal Reserve’s raising interest rates.
Bank Indonesia’s Governor Perry Warjiyo told a press conference that developed countries should ensure that the normalisation policy only posed minimum impacts to the global financial market and that it did not pose any spillover effect to developing countries.
The Federal Reserve has recently said that the central bank would have to raise interest rates up “more aggressively”, expecting “four, maybe five hikes” this year, which was expected to impact the debt condition or the financial stability of other countries, especially emerging economies.
Indonesia’s central bank has also moved to curb inflation, including by promoting the use of local currency settlement in cross-border trade and investment, as an effort to reduce dependency on the US dollar.
