The government should exercise caution in preparing a monetary policy. It should also ensure that it will not burden the central bank with political interests and draw attention to the fiscal sector to maintain sustainable economic growth.
Jakarta (ANTARA) - People's Consultative Assembly (MPR) Chairman Bambang Soesatyo opined that the government’s presence in a monetary council, discoursed in the revision of the Bank Indonesia (BI) law, will potentially create problems in future.

The government should not encumber the central bank with political interests but rather optimize the fiscal policy to maintain the nation’s economic performance, Soesatyo noted in a written statement released on Saturday.

"The government should exercise caution in preparing a monetary policy. It should also ensure that it will not burden the central bank with political interests and draw attention to the fiscal sector to maintain sustainable economic growth," he emphasized.

Furthermore, the MPR chairman encouraged the government to not only revise the BI law but also make innovations to solve frequent fiscal issues, including state revenues, for which the target is rarely achieved.

"Moreover, the Indonesian economy is currently contracting, while on the other hand, the banking sector is in need of immediate improvement," he pointed out.

Earlier, Prof. Dr Fx Sugiyanto of the Diponegoro University in Semarang, Central Java, remarked that the monetary council or macroeconomic policy council was not required to revise the law, as it will lead to what he termed as a policy overdose.

The economic professor stated that if the council aims to improve coordination, then the Financial System Stability Committee (KSSK), formed under Law No. 9 of 2016, has already taken that aspect into account.

Sugiyanto opined that the monetary council or macroeconomic policy council will solely disrupt the central bank's independence.

According to the draft of the third amendment to the law, particularly article 9B, paragraph (1), the finance minister will chair the monetary council.

The monetary council will comprise the finance minister, economic minister, BI governor, BI deputy governors, and chief of the board of commissioners of the Financial Service Authority (OJK).

The monetary council will be tasked with leading, coordinating, and directing the monetary policy to be relevant to the government's general policy in the economic sector.

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Translator: Satyagraha/Suharto
Editor: Sri Haryati
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