JAKARTA (ANTARA) – Bank Indonesia (BI) emphasized the importance of policy coordination in overcoming the global challenges clouding the global economy at the G20 meeting in Brazil.
BI drew attention to this aspect at the Third Meeting of Finance Ministers and Central Bank Governors of the G20 Countries (FMCBG) under the Brazilian Presidency on July 25-26, 2024 in Rio de Janeiro, Brazil.
„Global uncertainty, such as monetary policy divergence and high public debt in many developed countries, has impacted on the limited ability of developing countries to maintain economic stability and growth,” BI Governor Perry Vargeo noted in an official statement in Jakarta on Monday. .
Vargio therefore called on developed countries to take action to overcome the spillover of global challenges to developing countries.
Steps include strengthening the transparency of monetary policy to provide answers to actors in the financial sector and clarity about policy directions, strengthening global stability, maintaining feedback and calming market reactions.
Other necessary measures include implementing measures to reduce excessive debt levels and implementing a more prudent sustainable fiscal policy, as well as strengthening the coordination of fiscal and monetary policies and structural reforms to increase productivity.
At the meeting, ministers and central bank governors from G20 members agreed that the global economy is growing resiliently, but is still clouded by uncertainties that have the potential to derail medium-term growth prospects.
Therefore, the G20 agreed to promote international cooperation.
In the financial sector, ministers and central bank governors felt that the resilience of the global financial system was being maintained and supported by robust regulations and supervision.
In the future, efforts to strengthen resilience in operational quality should continue to be a concern in line with the increasing use of digital technology.
BI emphasized the importance of comprehensive risk assessments, good governance, effective cyber incident handling and recovery planning, and technology and infrastructure capable of mitigating risks.
The third meeting of the G20 FMCBG under the Brazilian presidency continued discussions on various key agenda items under the presidency’s main theme, „Building a just world and a sustainable planet”.
Topics discussed include the global economic outlook and current global challenges, the financial sector and financial inclusion, international tax cooperation, climate change, financing for sustainable development, capital flows and global debt.
Also, in the discussion on the financial inclusion agenda, Indonesia welcomed the progress of the G20 Global Partnership for Financial Inclusion (GPFI) in promoting progress in economic and financial inclusion.
During the 2022 Indonesian Presidency, BI emphasized three approaches to promote financial inclusion, including access to and use of financial products and services to empower MSMEs and improve public welfare, including financial literacy and consumer protection.
Other steps include implementation of macroprudential policies to promote liquidity in credit delivery integrated with fiscal policy and digitization of payment systems with digital financial infrastructure and cooperation in cross-border payment systems.
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