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Jakarta Post

Govt moves to restore confidence

  • Aditya Suharmoko and Dessy Nurhayati

    The Jakarta Post

Jakarta   /   Fri, October 10 2008   /  10:55 am

The government and the central bank have taken new steps aimed at bolstering market confidence, including allowing banks to set aside smaller reserves, extending a guarantee on deposits and allowing firms greater freedom to buy back shares. Indonesia's stock market has been hit hard by waves of panic selling amid the global financial turbulence, forcing the suspension of trading since Wednesday, although the Indonesian Stock Exchange (IDX) will resume trading on Friday. The index lost more than 20 percent of its value between Monday and midday Wednesday, prior to the suspension. Finance Minister Sri Mulyani Indrawati said Thursday the new measures were needed to restore confidence and help ease worries that the country's financial sector could falter as it emulates a global trend. Effective next month, the minimum reserve requirement (GWM) -- funds stored by...