National Strategy for Financial Market Development 2018-2024 - Bank Sentral Republik Indonesia
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August 26, 2019
National Strategy for Financial Market Development 2018-2024

The financial markets play a strategic role as source of economic financing, channel of transmission for monetary and fiscal policy as well as safeguard to preserve financial system stability. Research has shown that deep financial markets accelerate economic growth. Various financial market breakthroughs are urgently required to support infrastructure development as a prerequisite of sustainable economic growth. Therefore, 49.98% of funds from the financial markets have been targeted to support infrastructure development during the period from 2020-2024.

Future strategic financial market development initiatives in Indonesia must be oriented towards achieving qualities of deep and globally competitive financial markets. Such qualities are: (i) ability to provide alternative sources of financing and investment; (ii) ability to facilitate risk mitigation; and (iii) ability to promote transaction efficiency by refining the quality of financial market infrastructure.

Financial market development and deepening can only be achieved through strong coordination between the relevant financial market authorities and institutions. Accordingly, Indonesia financial market authorities are required to agree and formulate a national strategy as a reference as well as pledge of commitment for all stakeholders when developing and deepening of financial market. To that end, Bank Indonesia, the Ministry of Finance, and Financial Services Authority (OJK) have established the Coordination Forum on Development Financing by means of Financial Market (FK-PPPK).

The Coordination Forum was mandated with formulating a National Financial Market Development and Deepening Strategy (SN-PPPK) as a comprehensive and measureable single policy framework oriented towards realising the vision of creating deep, liquid, efficient, inclusive and secure financial markets.

Consequently, Coordination Forum on Development Financing by means of Financial Market (FK-PPPK) applied a top-down approach to develop a framework encompassing three main pillars as follows: (i) sources of economic financing and risk management; (ii) market infrastructure development; and (iii) policy coordination, regulatory harmonisation and education.

The three pillars have been elaborated within seven development elements to be implemented in seven financial markets, namely the government bond market, corporate bond market, money market, foreign exchange market, stock market, structured products market and Islamic financial market.

The SN-PPPK has been divided into three implementation stages, namely Strengthening the Foundations from 2018-2019, Acceleration from 2020-2022 and then Deepening from 2023-2024. 

SNPPPK-BI-EN.pdfNational Strategy for Financial Market Development 2018-2024 (download).pdf

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