Indonesia wants a synchronized monetary exit policy with the G20

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NUSA DUA, Indonesia, December 9 (Reuters) – G20 President Indonesia will seek synchronized normalization of global policy as developed countries begin to tighten monetary policy as their economies recover from the COVID pandemic -19, the country’s top economic leaders said Thursday.

The comments came as Indonesia launched the first meetings of the G20 financial track under its chairmanship on the tourist island of Bali, where exit policy strategy was high on the G20’s agenda. a meeting.

Indonesia wanted policy normalization “well calibrated, well planned and well communicated” by the developed world, said Bank Indonesia Governor Perry Warjiyo, which would avoid fallout for emerging markets lagging behind economic recovery .

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“Emerging countries generally still wish to support their economic recovery. For this, emerging countries which do not foresee political normalization should be given the opportunity to protect themselves,” Warjiyo told reporters.

The meeting took place in a hybrid format, with some participants physically present, others remotely.

Policymakers around the world are reversing their relaxed monetary and fiscal policies implemented to shield their economies from the impact of the pandemic, as price increases begin to escalate.

The synchronization of policies means that developed countries should fight rising inflation with the right tools to avoid “inflicting damage on the rest of the world,” said Indonesian Finance Minister Sri Mulyani Indrawati.

“They should take measure, take cautious action, be more staged,” she said. “So they don’t use a blanket policy that will affect every economy, when the problem is micro-structure. “

Indonesia was one of the emerging countries most affected by capital outflows during the so-called “taper tantrum”, when the US Federal Reserve announced a quantitative easing plan in 2013, which saw the rupee fall 20% against the dollar.

Officials said Indonesia can withstand this Fed’s tapered time better, as the global commodity boom has improved its external balances.

Meanwhile, the global economic recovery from the pandemic has been uneven due to the uneven distribution of vaccines, with poorer countries struggling to vaccinate isolated populations, Sri Mulyani said.

She called for a commitment of funding to tackle the current pandemic and mitigate future global epidemics, which she hoped could be agreed during the Indonesian presidency under the new G20 working group.

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Additional reporting by Gayatri Suroyo in Jakarta; Editing by Martin Petty

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