Finance Minister Purbaya Yudhi Sadewa emphasized his support for changes to the Law on the Development and Strengthening of the Financial Sector (P2SK) during the Financial Forum in Jakarta (03/12).

Expanded Central Bank Mandate to Support Economic Growth

Minister Sadewa explained that the revision brings significant changes, particularly expanding the roles of institutions in the Financial System Stability Committee (KSSK), especially Bank Indonesia (BI). The central bank’s responsibilities will now include promoting economic growth in addition to maintaining exchange rate stability and price stability.

“Previously, the central bank’s role was only to maintain exchange rates and translate that into price stability. Now, it will also drive economic growth. This is very positive,” he said.

Improved Coordination Between Fiscal and Monetary Policies

The minister noted that the law revision strengthens coordination between fiscal and monetary policies, which had previously been divided across different institutions.

“Before, each institution tended to stay within its corridor. With the revision, coordination will become more flexible and complementary, allowing the government and the central bank to respond faster to economic changes and financial crises,” he explained.

He added that overlapping discussions with the central bank will allow more integrated actions. “When I focus on growth, we usually implement fiscal policies, but economic engines are not powered by fiscal policy alone. We also need monetary support to mobilize the private sector faster,” Minister Sadewa said.

Strengthening Indonesia’s Financial Safety Net

A primary goal of the P2SK revision is to build a strong financial safety net through coordinated roles of the Financial Services Authority (OJK), Bank Indonesia, the Indonesia Deposit Insurance Corporation (LPS), and the Ministry of Finance.

“Maximizing the instruments we have in BI, OJK, and the Ministry is essential to prevent crises and ensure the economy remains strong. If necessary, the new P2SK law also gives LPS more room to act quickly. That’s what we hope for,” the minister added.

By expanding mandates and improving coordination, the revised law enables faster, more effective responses to financial risks, helping secure Indonesia’s economic stability and resilience against global uncertainties.

PHOTO: FREEPIK

This article was created with AI assistance.