TEMPO.CO, Jakarta- Bank Indonesia (BI) governor Agus Martowardojo asked people not to be provoked by US-based financial institution JP Morgan’s recommendations that have caused panic. “Please remain calm,” said Agus on Wednesday, August 26.
Agus lamented JP Morgan’s assessment on the increase in Indonesia’s loans by basing on the 2016 state budget draft (RAPBN) as its still a draft. “It will still be discussed and decided in October,” he said.
In the 2016 RAPBN, Agus said that state bonds only increase by Rp50 trillion while state budget financing deficit is around 2.1 percent. However, according to the law, deficit limit is three percent. “So, it’s not something that is relevant,” said Agus.
Agus said Indonesia’s economic condition has improved and concerned that people will sell state bonds with cheap prices, but purchase them with high prices. “So, we must be careful,” said Agus.
Finance Minister Bambang Brodjonegoro said he had taken firm action against JP Morgan. However, Bambang declined to explain the sanctions imposed on the institution. “We have reprimanded and give them sanctions,” said Bambang.
Previously, JP Morgan recommended investors to release Indonesia’s state bonds because rupiah exchange rate against US dollar reached its lowest on Monday. They even predicted rupiah would reach 14,300 per US dollar.