{
  "id": 340897,
  "title": "A stronger macroeconomic framework for a stronger Indonesia",
  "url": "https://urgent.news/2026/08/06/a-stronger-macroeconomic-framework-for-a-stronger-indonesia",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-06T03:10:10.000Z",
  "source": {
    "name": "The Jakarta Post Academia",
    "slug": "the-jakarta-post-academia",
    "url": "https://www.thejakartapost.com/opinion/2026/08/06/a-stronger-macroeconomic-framework-for-a-stronger-indonesia.html"
  },
  "original_language": "en",
  "account": "Indonesia confronts a pivotal decision regarding its macroeconomic framework, which is both expensive to maintain and less effective. The nation has experienced a challenging year with the rupiah facing repeated pressure, Bank Indonesia (BI) intervening heavily to stabilize markets, fiscal space dwindling, and global uncertainty persisting. However, the recent decline in oil prices, if maintained, presents an opportunity to reinforce Indonesia's macroeconomic framework before the onset of the next external shock.\n\nThe current policy mix, involving foreign exchange intervention, regulatory measures, and active liquidity management, is crucial in maintaining the stability of the rupiah. Nevertheless, it has also resulted in the central bank becoming a primary source of financing for the public sector, with official intervention extending to areas typically managed by market forces. This accumulation of policies indicates a broader issue – policy is taking the place of markets, and intervention is diminishing flexibility.\n\nNo country can sustainably rely on dwindling reserve buffers, growing central bank balance sheets, or the substitution of markets with official intervention indefinitely. The key to resolving this lies in rebuilding confidence, which depends on the public's willingness to hold the country's currency and financial assets. Indonesia's tried-and-true doctrine of \"besar aktif\" (independent and active) can serve as a guiding principle for economic policy.\n\nThis philosophy advocates for crafting policy around Indonesia's unique economic conditions rather than aligning with those of other nations, and ensuring that each policy tool serves a clear purpose while adapting to the dynamic domestic and global environment. To accomplish this, the macroeconomic system must be reimagined. Fiscal policy, monetary policy, and financial markets are no longer isolated entities but integral components of a unified system aimed at preserving stability while fostering sustainable growth.\n\nThe renewal of this system hinges on three key principles: restoring coherence by assigning a clear purpose to every policy instrument; enhancing coordination to ensure that policies complement rather than negate each other; and improving communication to ensure that markets, businesses, and households comprehend the overarching strategy behind policy decisions. These principles collectively strengthen credibility, paving the way for Indonesia's economic future.",
  "summary": "Indonesia now faces an important choice. The current policy mix is costly to maintain while becoming less effective.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}