Caixin's Grim Signal

Global financial markets have a tendency to adopt one main issue as a guidepost. Two weeks ago, people were worried whether the US Federal Reserve will raise interest rates. Now, the topic has shifted across the ocean to the Chinese economy.

Before the market's guidepost changed, the delay of the Fed's interest hike actually troubled Indonesia. The Fed, however, is still signaling that US interest rates could rise in the near future. So, in the end, leaving the decision hanging only perpetuates speculation and uncertainty. Both the government and Bank Indonesia are obviously facing more difficulty in setting the appropriate direction for macroeconomic or monetary policy, as they have to speculate on what the impact of the Fed's decision would be like.

September 29, 2015