OJK described as positive the Fed`s decision to trim stimulus

The decision of the US central bank is in line with the market expectation, Muliaman D. Hadad, chairman of the OJK Commissioners, said.

Jakarta (ANTARA News) - The Financial Service Authority (OJK) described as positive the Feds decision to trim its massive financial stimulus by US$10 billion to US$75 billion a month starting January, 2014.

The decision of the US central bank is in line with the market expectation, Muliaman D. Hadad, chairman of the OJK Commissioners, said here on Monday.

"The decision of the Fed is positive as it gives certainty to the market players, who are now making price adjustments of shares or other securities ahead of the implementation of the decision," Muliaman in a year end new conference.

He said the Feds decision is also in line with the market expectation which wants the stimulus cut to be made by phases to sustain economic growth while keeping a low interest rate.

"Meanwhile, we will continue to monitor and take necessary steps to maintain the stability of domestic financial market," he said.

He said global economic slowdown has its impact on the performance of the regional and global stock exchanges including the Indonesian Stock Exchange (BEI).

So far this year the BEI index has lost around 3.75 percent to close at 4,195 points on Dec. 20.

The decline in the BEI index resulted in a 19.63 percent fall in the market capitalization from US$430,094 million on January 2, 2013 to US$345,664 million on Dec. 19 , 2013.

"As part of the world economy, Indonesia will not be isolated from the negative impact of global sentiments. In share and securities markets there is big net sell. As a result the rupiah continues to be under pressure," he said.

He said the Indonesian economic authorities have taken immediate steps to calm down the market by launching policy package in a bid to protect the domestic economy from the impact of change in the global economic policy.

"OJK has taken a buyback initiative to prevent the share prices from diving deeper," he said.(*)

Editor: Heru Purwanto
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