ASEAN Finance Ministers and Bank Governors Discuss Economic Resilience in Bali Meeting

Great threats are lurking around the world. (ANTARA PHOTO/M Risyal Hidayat - POOL)

On Friday, March 31, 2023, finance ministers and central bank governors from ASEAN countries held a meeting in Bali as part of Indonesia’s chairmanship of ASEAN 2023.

During the meeting, the governor of Bank Indonesia, Perry Warjiyo, emphasized the importance of ASEAN countries improving their resilience and accelerating their growth engines amid the ongoing economic recovery from the COVID-19 pandemic.

Warjiyo also noted that ASEAN countries are still facing global dynamics that are constantly evolving, necessitating policy adaptation, such as accelerating digitalization and sustainable finance.

He further emphasized that ASEAN is expected to contribute more to global efforts to promote growth and stability and accelerate the achievement of ASEAN’s financial integration goals.

In the opening remarks of the 1st ASEAN Finance Ministers & Central Bank Governors Meeting (AFMGM) 2023, Warjiyo called for concrete and practical actions to address emerging challenges while also promoting regional integration. He emphasized that it is necessary to think globally, act swiftly and move fast to overcome these challenges.

The AFMGM had three main agendas. First, they discussed the macroeconomic dynamics and global and regional financial stability, as well as formulating optimal policy mixes.

Warjiyo emphasized the importance of optimal policy mixes, such as coordination between fiscal and monetary policies, monetary policy mixes, including interest rate intervention, macroprudential management, and macroeconomic and financial stability frameworks.

Secondly, they focused on promoting faster, cheaper, more transparent and inclusive cross-border payment system connectivity to increase transactions in support of regional economic growth.

Five ASEAN countries signed an MoU at the end of 2022 to implement cross-border payment system connectivity, and this year, the cooperation will be expanded to all ASEAN members.

This will promote financial and economic inclusion across all segments of society, including SMEs, youth and women, with affordable cross-border digital payment systems.

Thirdly, the meeting addressed the dynamics of the current global financial market, which is greatly influenced by the rapid increase in interest rates by major central banks worldwide.

The increase in interest rates in developed countries has consequences for the stability of developing countries. Therefore, it is necessary to implement careful macroeconomic policies, both fiscal and monetary, to mitigate these consequences.

Additionally, the meeting discussed measures to increase trade and investment transactions using local currency or local currency transactions (LCT). The goal is to promote regional economic growth, financial stability, and a more inclusive financial system for all segments of society.