'Sell Indonesia' sweeps trading desks as Prabowo tightens grip
Indonesia's stock and bond markets are under selling pressure as President Prabowo Subianto tightens his hold on economic management. Net outflows from foreign investors have accelerated. The rupiah is trading near its weakest levels of recent years.
Straits Times BusinessAccording to the Straits Times, Indonesia's markets have led to a 'sell' view on global trading desks following steps by President Prabowo Subianto that have tightened his control over economic policy. The Jakarta stock index has declined by around six per cent in recent weeks. Net outflows from foreign investors have accelerated notably.
Investors point to uncertainties over the independence of the fiscal authority, the expanding role of the state investment fund Danantara, and nationalist commodity policies. The rupiah has also weakened against the dollar in this period, approaching its weakest levels in recent years. Some analysts say the current backdrop could deepen the 'risk-off' theme.
The government signalled it will issue a statement shortly to ease investor concerns. Independent economists stress that consistent implementation of institutional reforms will be decisive in restoring confidence. May trade data and foreign portfolio flows will be closely watched in the coming weeks.
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