Will this Stimulus Work?
It has been a hectic few weeks. In a surprising move, the government opened up more sectors in which foreign investors can own a majority stake and, in some cases, up to 100 percent. Then, Bank Indonesia announced last week another 25-basis-point cut from its rupiah interest rate, bringing down its Bank Indonesia rate to seven percent. The critical test would be whether the rupiah can be kept stable long enough to breathe more life into our sluggish economy.
After last month's first 25-basis-point cut, the currency has fared surprisingly well. The rupiah opened the year at the Rp13,900 per US dollar level and has now actually strengthened to around Rp13,500, notwithstanding the US Federal Reserve's increase in US-dollar interest rates.
February 23, 2016
It has been a hectic few weeks. In a surprising move, the government opened up more sectors in which foreign investors can own a majority stake and, in some cases, up to 100 percent. Then, Bank Indonesia announced last week another 25-basis-point cut from its rupiah interest rate, bringing down its Bank Indonesia rate to seven percent. The critical test would be whether the rupiah can be kept stable long enough to breathe more life into our slugg
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