Monetary policy makers in each country are required to draw up measures that promote growth and mitigate risks.
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Bank Indonesia Arief Kamaludin|KATADATA

Bank Indonesia Governor (BI) Agus Martowardojo has identified three major challenges faced by the global economy. The challenges were confirmed by The Federal Reserve Bank of New York (FRBNY) President William C. Dudley.

Agus made the statement during a seminar co-organised by the Federal Reserve Bank in Nusa Dua, Bali, on Monday (1/8). The seminar on "Managing Stability and Growth under the Economic and Monetary Divergence" reflects the strategic relationship between BI and the FRBNY.

In his opening speech, Agus said the first challenge is how to strategize in pursuing economic growth targets in the aftermath of global financial crises. The second challenge is how to formulate monetary policies that effectively address increasingly open economic conditions.

(Read: Sri Mulyani: Global Economic Growth Still Fragile)

The third challenge is how to achieve financial stability amid the divergence of global monetary policies. "These three topics were specifically discussed at the seminar," Agus said as quoted from BI's press release, Monday (1/8).

FRBNY President William C. Dudley agreed with Agus that the diversity of economic and monetary policies adopted by the world's largest economies is a challenge for global economic recovery. He said that differing policies could pose a risk of their own.

Monetary policy makers in each country are required to draw up measures that promote growth and mitigate risks. Another demand is to make policies aimed at maintaining monetary and financial stability.

According to Dudley, monetary policies should not be static or fixed, but adjustable to economic conditions. There are two important measures of monetary policy-making.

(Read: IMF Trims Global Growth Projection in Brexit Aftermath)

The first is to have an expansive view of the global economic ecosystem. To that end, monetary policy decisions must be made quickly. The second is for central banks to establish clear and consistent communication.

The seminar organised the FRBNY and BI is part of the Executives' Meeting of East Asia-Pacific Central Banks (EMEAP). Eleven jurisdictions are EMEAP members: Australia, New Zealand, Indonesia, Thailand, Malaysia, the Philippines, Singapore, Hong Kong, China, Korea and Japan.

Two weeks ago, the International Monetary Fund (IMF) cut its global economic growth forecast for this year to 3.1 percent from an initial projection of 3.2 percent.

(Read: Global Financial Agencies Lower Economic Growth Outlook)

The main reason for the correction was Britain's exit from European Union (Brexit). The British move delivered another wave of uncertainty to the currently vulnerable business sector. In addition, consumer confidence is down.

"The real impact of Brexit will be visible gradually, and will create more economic and political uncertainties," IMF Chief Economist and Economic Counselor Maurice Obstfeld said in an official statement on 19 July.