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View all search resultsAs the rupiah grapples with a "perfect storm" of global dollar strength and domestic regulatory uncertainty, Indonesia faces a critical test of market confidence that may require a fresh infusion of professional leadership to resolve.
Bonds jumped and a rebound in stock markets slowed down on Wednesday after softer-than-expected US retail sales figures, while a rally in the yen has extended and might be beginning to signal a shift in investor thinking since Japan's election.
Doubling the equity limit for insurers and pension funds to 20 percent from currently 8 percent can be either a bold boost for market stability or a dangerous gamble with institutional solvency. However, "flexibility" might be a double-edged sword that threatens to undermine asset-liability matching and trigger a capital-requirement crisis.
The yield on Indonesian government bonds has climbed to its highest level in more than three months on the back of general uncertainty, fiscal worries and concerns about the independence of Bank Indonesia (BI) following the nomination of Thomas “Tommy” Djiwandono as deputy governor.
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