On behalf of the Indonesian authorities, we would like to thank the IMF mission team for the comprehensive and constructive policy dialogue during the 2019 Article IV consultation. The consultation has provided valuable venues to discuss the many progress of home-grown policies as well as reforms that Indonesia is currently undertaking. We appreciate staff’s effort to understand the domestic economy and country specific challenges as well as authorities’ policies and objectives. The authorities are encouraged by staff’s acknowledgement of Indonesia’s solid macroeconomic performance as well as favorable outlook. Accordingly, the authorities broadly concur with the thrust of staff’s appraisal with an important caveat on key recommendations, namely on macroprudential policy.
The income tax and value added tax are known as PPh and PPN respectively.
The preemptive increases in the policy rate, namely BI 7-Day Reverse Repo Rate (BI7DRR), were linked to the forward-looking, anticipatory response of Bank Indonesia to the risk of increases in the Federal Funds Rate (FFR) and uncertainty on global financial markets. The front-loading response meant that the magnitude of the increase in the Indonesian policy rate had considered the possible extent of an increase in the FFR, so that the interest rate differential would remain sufficiently large to maintain the attractiveness of domestic assets. Alongside this, the ahead-of-the-curve response was related to the fact that the magnitude of Indonesia’s policy rate increases would also anticipate interest rate increases in other emerging markets so that the domestic financial market would remain competitive.
The government securities reverse repo and the BI Certificate are also called RR-SBN and SBI respectively.
This regulation is also known as KPPK.
This forum is also called FK-PPK.
The National Financial Market Development and Deepening Strategy is also known as SN-PPPK.