RESPONDING to the rapid development of the conflict in the Middle East following Israel’s attack on Iran’s diplomatic facilities in Damascus and Iran’s retaliatory attack on Israel, the Coordinating Ministry for Economic Affairs held a Coordination Meeting involving all elements of the Deputy along with the Ministry of Foreign Affairs and a number of Ambassadors, Monday (15/4) .
Observing the latest developments in conditions in the Middle East Region, Coordinating Minister for Economic Affairs Airlangga Hartarto also invited the Director General of Asia Pacific and Africa (Dirjen Aspasaf), the Indonesian Ambassador in Amman, the Indonesian Ambassador in Tehran, and the Indonesian Embassy Representative in Beirut to convey current conditions related to the situation in the Middle East, which will later become the background for the steps that will be taken next.
“The implementation of this Coordination Meeting is an assessment of efforts to de-escalate the impact of conflict in the Middle East region on the Indonesian economy,” said Airlangga.
The Indonesian Ambassador to Amman (Jordan) delivered an update on the development of the situation in the region and expressed the hope that this development would not escalate because it would have an impact on the economies of countries in the region and including Indonesia.
“Various parties are currently trying to reduce the escalation of the conflict. “In general, tensions in the region are increasing, but so far they are still manageable,” said Ambassador Ade Padmo Sarwono.
The Indonesian Ambassador to Tehran (Iran) also conveyed developments in Iran’s domestic politics and anticipated various escalatory impacts from Iran’s attack on Israel.
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“We need to anticipate the impact of tensions in the region and disruption of logistics and supply chains, because of the importance of the position and route of the Strait of Hormuz which accommodates tens of thousands of ships per year,” explained Ambassador Ronny P Yuliantoro.
Director General of Aspasaf Abdul Kadir Jailani also emphasized the need to anticipate possible escalation of the current situation in the region.
Abdul Kadir also said that all parties currently do not want an escalation. However, it is necessary to anticipate various possibilities that will occur and their impact on the economy considering the importance of the Strait of Hormuz and the Red Sea, as well as the influence on oil prices and logistics costs.
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The escalation of the geopolitical conflict between Iran and Israel at the weekend had an impact on global economic conditions. Global crude oil prices are still fluctuating.
In Monday’s trading (15/4), the price of Brent crude oil weakened 0.18% (dtd) to 90.29 US$/Barrel, much higher compared to the position on January 1 2024 of 77.4 US$/Barrel and WTI crude oil fell 0.28% to 85.42 US$/Barrel, higher than the position on January 1, 2024 of 71.65 US$/Barrel.
The escalation of the geopolitical conflict has also caused the US dollar index to increase, which has weakened the financial indicators of a number of countries, especially emerging markets.
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The majority of exchange rates in the Asia Pacific region moved lower against the US dollar on Monday (15/4), such as the Thai Baht and Korean Won depreciating by 0.24% (dtd), and the Malaysian Ringgit by 0.24% (dtd).
The majority of exchanges in Asia Pacific are also moving in the red zone. At Market Closing (15/04) the Malaysian FKLCI index weakened 0.55% (dtd), followed by the Kospi at 0.42% (dtd).
For Indonesia, the Indonesian Stock Exchange and domestic Rupiah Spot Market are still closed in line with the Idul Fitri holiday. However, based on foreign spot market data (Trading Economics), the Rupiah exchange rate is at IDR 16,060 or experiencing an appreciation of 0.31% (dtd), better than other countries such as South Korea, the Philippines and Japan.
In order to reduce the impact of rising global oil prices due to the geopolitical conflict between Iran and Israel, the Government is also monitoring the condition of the APBN so that it can optimally carry out its role as a shock absorber. Further coordination will be carried out with the monetary and fiscal authorities to produce a policy mix to maintain economic growth and stability.
Also present at the Coordination Meeting were Secretary of the Coordinating Ministry for the Economy Susiwijono Moegiarso, Deputy for Macroeconomics and Finance Ferry Irawan, Deputy for Food and Agribusiness Dida Gardera, Deputy for BUMN Business Development, Research and Innovation Elen Setiadi, Deputy for International Economic Cooperation Edi Prio Pambudi , Spokesperson for the Coordinating Ministry for the Economy Haryo Limanseto, as well as Special Staff to the Coordinating Minister for the Economy Raden Pardede and Reza Yamora Siregar. (RO/Z-1)
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