Indonesia expects ‘concrete measures’ to calm markets

October 11, 2011 1:16 pm 0 comments

Jakarta (The Jakarta Post/ANN) - Bank Indonesia deputy governor Hartadi A. Sarwono expects “concrete measures” from the meeting between major G20 economies next week to calm the volatile global financial market over Euro debt woes.

“In my view, in a G20 forum next week that I will attend, we can expect concrete measures that the G20 will launch to increase market confidence,” Hartadi told reporters on Friday.

Trillions of dollars have been wiped off the global financial market in the past two months as investors’ jitters over the eurozone debt crisis prompted massive sell-offs of risky assets in favor of savings or safer instruments such as the US dollar.

Hartadi said the sell-offs could be tackled by a commitment from European countries and the International Monetary Fund through the so-called European Financial Stability Facility - a fund pool to help EU member states out of budgetary and fiscal woes and help recapitalize their banking systems.

“If the commitment is launched and is strongly supported by the G20, the current situation will be calmer,” he added.

Hartadi said the commitment was between EU countries, but Indonesia, the only Southeast Asian member of G20, has an interest in such a commitment because it would calm the markets. “We don’t have problems; the troubles are in Europe. But if there’s no support, it complicates us.”

Previous financial crises show that massive fluctuations in global financial markets might affect the real sector, as individual and business monetary gains become disrupted and negative perceptions of the economy multiply.

“Investors’ fears are actually coming out of feelings of ‘no way out’. There’s no clear view of the way out,” said Syailendra Capital president director Jos Parengkuan.

In Indonesia, international funds dumped Rp 14 trillion (US$1.56 billion) in the stock market from August to September, while foreign ownership in government bonds slid Rp 33 trillion in less than a month.

Article source: http://sg.news.yahoo.com/indonesia-expects-concrete-measures-calm-markets-041002564.html

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