JAKARTA (TheInsiderStories) - The Ministry of Finance terminate all ties with US’s JP Morgan Chase & Co related to the research has potentially disrupt the stability of domestic financial, said Marwanto Harjowiryono, the director general of treasury at the Ministry of Finance in a statement. It said, the termination was effective on Jan. 1, 2017.
Recently, JP Morgan has picked as the perception bank with other banks and has also several time help Indonesia’s government bond sales. Based on the decision, the ministry cut all the transaction with the bank and inform all the customer the customer does not make transactions at the bank.
In November, JP Morgan released a report double downgraded the country to underweight from overweight, after reading a trend that the benchmark US 10-year treasuries offered more attractive yields, which in turn increased risks of fixed-income investment into emerging market countries like Indonesia.
This was the second time in just over a year that Indonesia’s finance ministry was infuriated by a JP Morgan assessment. In first research in August 20, former Finance Ministry Bambang Brodjonegoro has given a sanction to JP Morgan after spreading panic in the country on their report on government securities. JPMorgan recommended for holding a smaller exposure to the Indonesian government bonds.
JPMorgan moved to “underweight” from “overweight” on Indonesian government bonds in a report dated Aug. 20. Some of the reasons it cited were China’s devaluation of its currency and Indonesia’s planned increase in government borrowings.
“When there is negative analysis about Indonesia, we as the authorities have to take action because no matter what, it is something that is also unethical: turning a country into a commodity,” Brodjonegoro has said.