Coordinating Minister for Economic Affairs, Airlangga Hartarto (center), during a meeting with ministry officials and the ambassadors of several friendly countries in Jakarta on Monday (April 15, 2024). He said the domino effect of the escalating conflict in the Middle East on Indonesia's financial market would only become visible when the market opens on Tuesday (April 16) (ANTARA/HO-Kemenko Perekonomian)
Jakarta (ANTARA) - Coordinating Minister for Economic Affairs, Airlangga Hartarto, on Monday said that the government has prepared several strategic policies to ensure that the Iran-Israel conflict does not have a significant impact on Indonesia's economy.
"We must maintain the level of market confidence in the ability of the national economy to respond to conflict escalation impacts," he said in Jakarta.
According to the minister, the domino effect of the escalating conflict in the Middle East on Indonesia's financial market would only become visible when the market opens on Tuesday morning (April 16, 2024).
Hartarto said that the conflict could potentially trigger an increase in the prices of several commodities, including oil — due to disruptions in supply — and gold because it is considered a safe haven asset.
He noted that the rising geopolitical tensions in the area around the Suez Canal could disrupt the supply chains of wheat and production equipment components brought from Europe as well as push up cargo costs.
To prepare anticipatory measures, the Coordinating Ministry for Economic Affairs held a meeting with the ambassadors of several friendly countries in Jakarta on Monday.
The topics discussed at the meeting included the response to the impacts of conflicts at the regional and global levels, the performance of the banking sector and capital market, and the control of inflation.
The meeting also discussed plans for coordinating the fiscal and monetary policy mix with the relevant authorities for exchange rate control strategies and budget deficit management.
He affirmed that the government would continue to monitor global and regional developments and take the best measures to maintain the stability of the financial system.
He said that Indonesia's economy is still quite strong with economic growth maintained at above 5 percent and inflation under control.
As of February 2024, Indonesia's trade balance still recorded a surplus so the foreign exchange reserves in March were still strong.
"We hope market players remain calm and not take speculative steps," he added.
An Israeli attack on the Iranian Consulate in Damascus, Syria, on April 1 triggered its latest hostility with Iran.
Iran launched a retaliatory attack by firing dozens of ballistic missiles and hundreds of drones at Israel on Saturday night (April 13).
