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View all search resultsIndonesia’s financial markets have experienced significant turbulence in recent weeks, with the rupiah depreciating beyond Rp 18,000 per US dollar, the Indonesian Stock Exchange (IDX) Composite index falling by nearly half to below 6,000 points, 10-year government bond yields have climbed to 7.3 percent and the yield curve has flattened considerably amid substantial capital outflows. Together, these indicators suggest that investors are losing confidence in the government’s economic management. Yet the government has shown little indication of adjusting its policy direction.
Due to the reemergence of oil prices as a key determinant amid the Iran war, monetary authorities facing renewed inflation risks are becoming less likely to cut interest rates, keeping global borrowing costs elevated and tightening financial conditions across both advanced and emerging economies.
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