"The market has been 'price in', Hopefully, market expectations will not become too wild. That is what we have continued to do by guiding the policy," he said here on Tuesday.
He added that although the rupiah exchange rate had strengthened against the US dollar and the Jakarta composite index (IHSG) has become stable, the government would remain alert in case market conditions begin fluctuating again.
The Director General of Debt Management, Robert Pakpahan, meanwhile said liquidity in the Indonesian financial market is still affected by foreign investors, but if the Fed decides to reduce its monetary policy it is believed the Indonesian bond market will remain strong.
"If tapering off is really implemented, liquidity will flow out a bit, though because Indonesia`s liquidity is quite large, the bond market will remain strong," he said.
Further, Robert believed the government has prepared crisis management protocol in case capital reversals occur, and would conduct a simulation through a bond stabilization framework scheme in anticipation of a crisis.
"We assume if a crisis happens we will implement needed measures step by step. All parties have been aware of who has to be contacted and what the signals will be, as well as measures to take," he said.
Robert added that the government has prepared itself over the planned reduction of the Quantitative Easing stimulus because it had been made known months before, and with the recent issuance of a package of policies, market conditions have been relatively calm.
"We are following the US stimulus development, but in the past few days market conditions have been calmer. The tapering off plans also have not come on suddenly, so its impact would not be felt all at once," he said.
Also, Finance Minister Chatib Basri said consistency in the implementation of the policy package could prevent panic ahead of the Fed`s decision on the stimulus.
He noted, "Appealing to them to remain calm is not enough, but they must be able to see something that would not make them panic. So we must continue to implement the policies that we have taken," he said.
He added that assuring market players was very important and, therefore, the government has produced its policy package to improve the country`s current account and stabilize the rupiah exchange rate.(*)