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The country’s economy may have seen the worst and is now in the early stages of recovery but — don’t get too excited — the process is still “fragile,” Finance Minister Sri Mulyani Indrawati warned on Thursday.

The nation’s acting coordinating minister for the economy said she based her more optimistic assessment of the economy on a number of indicators that had shown positive signs since March. These include the country’s dollar-rupiah exchange rate, which has strengthened by 6.5 percent since January, and the Indonesia Stock Exchange’s key Jakarta Composite Index, which has rising almost 40 percent since the beginning of this year, Sri Mulyani said, speaking at a House or Representatives Commission XI hearing on finance.

“This shows that capital has started to flow in, not only because of positive sentiment toward Indonesia but also because domestic corporations’ performance was better than abroad.”

In addition, the country’s exports have shown a positive upward trend since March, supported by a rebound of commodity prices, she said. Key energy and other export commodities like oil and gas, coal, crude palm oil, rubber and metals have all increased significantly since their lows late last year, helping push up the country’s revenues and give businesses more optimism. A stronger rupiah also makes it cheaper for businesses and consumers to buy imported machinery and goods and pay expatriate salaries.

Sri Mulyani, however, warned people not to get carried away by the positive signals, adding, “It’s too early to say that the economy has recovered.”

She said the recovery process was still delicate because the productive sector of the economy had yet to recover, blaming this delay on bank lending rates, which have remained high.

Despite the central bank reducing its benchmark BI rate by 150 basis points since January, commercial banks have yet to follow suit and lower rates, despite government pressure. As a result business players have been reluctant to seek new loans.

Speaking at the same hearing, Miranda Goeltom, Bank Indonesia’s acting governor, said that banks appeared to be reluctant to increase their lending because of tight credit conditions and low demand from consumers. The country’s commercial banks have argued they are not giving out more loans because consumers, who are acting cautiously at the moment, are not asking for them.

“From the demand side, potential borrowers are expecting inflation to go down further and therefore they have postponed asking for credit, as they hope interest rates will go down as well. This is normal,” Miranda said.

“From the supply side, banks have been more conservative in disbursing credit as they have tightened requirements to access credit, on concerns of rising nonperforming loans,” Miranda said.

Haviz Zawai, chairman of the Commission XI, said Bank Indonesia and the government needed to do more to encourage state-owned banks to lead the way and reduce lending rates.

Michael Heise, chief economist from Allianz, predicted the economy could rebound in the second half of this year.