The Financial Services Authority (OJK) has spoken out regarding the impact of US President Donald Trump's 32% reciprocal tariffs on Indonesia. The Chairman of the OJK Board of Commissioners, Mahendra Siregar, stated that Indonesia's exports to neighboring countries contribute only one percent to gross domestic product (GDP). Therefore, the impact is still relatively small.

However, Mahendra continued that the US government is currently postponing the implementation of the reciprocal tariff and is temporarily imposing it at 10% for the next three months, until the Indonesian government can negotiate.

"The OJK fully supports the government's steps to conduct negotiations. This way, we can find a mutually beneficial solution," Mahendra said during an online press conference for the March 2025 Monthly Board of Commissioners Meeting on Friday (April 11, 2025).

Currently, Mahendra observes that Indonesia is still open to the entry of imported commodities from abroad, including the US. He believes this is necessary to balance the trade balance, which currently has a large surplus. This way, Indonesia can diversify its import sources to maintain a balanced trade balance with the US without requiring Indonesia to excessively increase its imports.

Regarding the impact of reciprocal tariffs on the financial industry, Mahendra acknowledged that Indonesia's capital markets and financial industry had been shaken for more than a week. The OJK has taken steps to discuss the matter with ministries/agencies, affected sectors, and financial services institutions.

"We will map out the steps needed to mitigate the risks we face," Mahendra said.

Mahendra emphasized that this measure will be effective if the government is committed to improving the industrial ecosystem impacted by the tariffs. This can be achieved through either fiscal incentives or policies to protect the domestic market. As a result, affected industries will no longer have to deal with high costs.

"More comprehensive improvements or reforms are needed to increase the resilience of the affected industries," Mahendra emphasized. According to Mahendra, improving the investment climate and conditions will provide positive momentum, thereby increasing the competitiveness of Indonesian industry on the global stage.

From the capital market side, OJK supports through the share buyback process without a general meeting of shareholders (GMS), adjustments in auto-rejection , and encouraging institutional investors to play a role, including government-owned financial services institutions or state-owned enterprises (BUMN).

Source: SWA

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