Bank Indonesia Governor Perry Warjiyo during the Indonesian G20 Presidency Agenda in Jakarta on Saturday (February 19, 2022). (ANTARA/Astrid Faidlatul Habibah).
Bank Indonesia (BI) Governor Perry Warjiyo stressed that the normalization of policies by developed countries should be conducted through good communication, proper planning, and calibration to avoid imperilling the recovery of developing countries.
"Developed countries that have begun to normalize (their policies) must put forward the principles of good calibration, planning, and communication," Warjiyo stated at the Indonesian G20 Presidency Agenda here on Saturday.
Warjiyo pointed out that BI had projected that the Fed would raise policy interest rates four times.
Hence, the monetary policy normalization measures must be adopted judiciously and appropriately, so that the market can prepare precautionary steps to handle its risks.
According to Warjiyo, normalization that is calibrated is crucial for markets and developing countries to evaluate and prepare their own monetary policies.
Related news: Normalization of calibrated policies should occur in all countries: BI
Meanwhile, the BI governor deems it necessary for developing countries to strengthen their fiscal durability to withstand the global impact arising from the developed countries' normalization plan.
Warjiyo noted that Indonesia had applied several measures to strengthen its resilience from the external front, with the first being to have healthy macroeconomic stability, such as fiscal and monetary financial stability.
Moreover, the monetary policy in Indonesia is pre-emptive, forward-looking, and extraordinary, which supports economic growth with fiscal coordination.
"How do we do it? Indonesia calibrates three monetary policy instruments, which are exchange rate stability, liquidity, and interest rate policy," Warjiyo pointed out.
Furthermore, Warjiyo stressed that an exit strategy to support recovery is a priority for policymakers worldwide.
"When recovery is underway, several nations head to policy normalization sooner than the others," he noted during the opening of the first G20 Finance Ministers and Central Bank Governors Meeting.
"Their monetary policy adjustment along with stimulus withdrawal affects the global economy," Warjiyo noted.
Related news: Indonesia to balance global, domestic agenda during G20 Presidency: BI
"Developed countries that have begun to normalize (their policies) must put forward the principles of good calibration, planning, and communication," Warjiyo stated at the Indonesian G20 Presidency Agenda here on Saturday.
Warjiyo pointed out that BI had projected that the Fed would raise policy interest rates four times.
Hence, the monetary policy normalization measures must be adopted judiciously and appropriately, so that the market can prepare precautionary steps to handle its risks.
According to Warjiyo, normalization that is calibrated is crucial for markets and developing countries to evaluate and prepare their own monetary policies.
Related news: Normalization of calibrated policies should occur in all countries: BI
Meanwhile, the BI governor deems it necessary for developing countries to strengthen their fiscal durability to withstand the global impact arising from the developed countries' normalization plan.
Warjiyo noted that Indonesia had applied several measures to strengthen its resilience from the external front, with the first being to have healthy macroeconomic stability, such as fiscal and monetary financial stability.
Moreover, the monetary policy in Indonesia is pre-emptive, forward-looking, and extraordinary, which supports economic growth with fiscal coordination.
"How do we do it? Indonesia calibrates three monetary policy instruments, which are exchange rate stability, liquidity, and interest rate policy," Warjiyo pointed out.
Furthermore, Warjiyo stressed that an exit strategy to support recovery is a priority for policymakers worldwide.
"When recovery is underway, several nations head to policy normalization sooner than the others," he noted during the opening of the first G20 Finance Ministers and Central Bank Governors Meeting.
"Their monetary policy adjustment along with stimulus withdrawal affects the global economy," Warjiyo noted.
Related news: Indonesia to balance global, domestic agenda during G20 Presidency: BI
