"We have asked them to clarify their assessment. They've explained to us, but we found their argument not credible. It's not that we think we're so great, but we look at ourselves and we look at other countries' economies," Nazara said.
"Our mindset is, if you're doing business here in Indonesia, the spirit is to maintain stability. Don't create unnecessary volatility to create business," he added.
Business as usual
A JPMorgan spokeswoman said on Tuesday that it continued to operate its business in Indonesia as usual. "The impact on our clients is minimal and we continue to work with the Ministry of Finance to resolve the matter," she said in an email.
In a note dated Nov. 13, JPMorgan downgraded emerging markets, including Indonesia and Brazil, citing higher risk premiums for their credit default swaps after Donald Trump won the U.S. presidential election.
"Bond markets are starting to price in faster growth and higher deficit," the bank wrote, adding that the "spike in volatility" may stop or reverse flows into fixed-income assets in emerging markets.
However, the bank said in the note that the downgrade on Indonesia and Brazil was a "tactical" response to Trump's victory. Both economies are improving, with lower policy rates likely to support valuations for 2017, it added.
Indonesia's 10-year credit default swap, a swap contract used to measure credit risk in fixed-income products, and the yield of its benchmark 10-year bonds spiked after the U.S. election, though they have since dipped.
Trump signaled more protective U.S. trade policies, raising concerns about the impact on developing markets.
Analysts have said that Indonesia's economy should be supported by domestic consumption, which makes up more than half of gross domestic product.
But the relatively high foreign ownership of government bonds and Indonesia's lack of depth of financial markets make it vulnerable to capital reversals, they say.
In 2015, then-Finance Minister Bambang Brodjonegoro said he had given JPMorgan a sanction that "will be disturbing for them and make them uncomfortable" after it recommended an "underweight" position on Indonesian bonds. He didn't say what the sanction was.
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