Minister Darmin Questions JP Morgan`s Analysis

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  • TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs Darmin Nasution expressed his appreciation to the Finance Ministry for terminating cooperation with US-based bank JP Morgan Chase to manage the 2017 State Budget.

    Darmin said that JP Morgan’s analysis was different from those provided by other rating agencies, such as Fitch, who improve Indonesia’s rating.

    “The rating [provided by JP Morgan] is significantly different [from those provided by other rating agencies]. I’m not sure what was the standards being used,” Darmin said at his office in Jakarta on Tuesday, January 3, 2017.

    Earlier on November 17, 2016, Finance Minister Sri Mulyani Indrawati signed a letter to terminate cooperation with JP Morgan. Finance Ministry’s director general of treasury Marwanto Harjowirjono issued another letter on December 9, 2016.

    The Finance Ministry viewed that JP Morgan’s analysis that downgraded Indonesia’s rating from overweight to underweight (a two-point decline) could disrupt the national economic stability.

    In Sri Mulyani’s letter, the government pointed out that it no longer receives payments through any JP Morgan’s branches. In addition, the government stated that it had completed rights and obligations related to performance and termination of JP Morgan’s services as a perception bank.

    Finally, the government in the letter stated that it would disseminate the termination of cooperation with JP Morgan to all units, staff, and customers. The decision takes effect starting from January 1, 2017.

    Marwanto added that the Finance Ministry would continue to build cooperation with other banks and rating agencies.

    “We will seek professional, credible, and accountable cooperation with stakeholders, including partnering banks,” Marwoto said without explaining the impact of the cooperation termination.