Indonesia’s finance and central bank officials said they will step up efforts to stabilize the currency and attract inflows after a week where the nation’s stocks tumbled at the fastest pace worldwide and its currency sank to all-time lows.
Perry Warjiyo Photographer: Dimas Ardian/Bloomberg
Indonesian Finance Minister Purbaya Yudhi Sadewa defended his country’s economic track record amid a slump in the rupiah and stocks, pointing to inflows into the debt market as proof investors remain optimistic.
Indonesia’s central bank took aggressive action to reverse a market selloff and support its currency, hiking interest rates in a surprise decision to halt foreign outflows triggered by policy uncertainty under President Prabowo Subianto.
Indonesia’s markets slumped on Monday, led by a sharp selloff in sovereign bonds, after the government’s latest attempt to shore up the currency failed to ease concern over its economic management.
Global investors are increasingly losing confidence in Indonesia on President Prabowo Subianto’s more populist and interventionist agenda.
Indonesia spent much of this week confronting a question that might have seemed unthinkable a few short years ago: what happens when investors stop believing in Southeast Asia’s largest economy?
Prabowo during an interview at his residence in Hambalang, West Java, on March 14.
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