Indonesia to Boost Asset Yields to Support Rupiah
Bank Indonesia Governor Perry Warjiyo and Finance Minister Purbaya announced a joint effort to increase asset yields to attract portfolio inflows and stabilize the currency. The move follows significant capital outflows and a decline in the rupiah amid concerns over government spending plans.
Indonesia will increase yields on domestic assets to attract portfolio inflows and stabilize the rupiah after the currency hit record lows. Bank Indonesia Governor Perry Warjiyo and the finance ministry agreed on the measure during a Saturday press conference. The move targets a reversal of heavy capital outflows that have pressured Southeast Asia’s largest economy throughout the year.
### Addressing Capital Flight and Market Volatility The Indonesian stock market has plunged more than 30% this year as investors weigh the spending plans of President Prabowo Subianto. Foreign holdings of Indonesian bonds have slumped to a near two-decade low, exacerbated by rising fuel subsidies linked to the Iran war.
