Indonesian bonds due 2015 headed for the worst week since January 2011 after the central bank unexpectedly raised its key interest rate for the first time in more than two years. The rupiah fell this week.
Jakarta Governor Joko Widodo, who leads popularity polls for Indonesia’s presidential election next year, affirmed his allegiance to the party of former leader Megawati Soekarnoputri and said she would decide if he runs.
Bank Indonesia unexpectedly raised its key interest rate for the first time since 2011 as Governor Agus Martowardojo accelerates efforts to support the currency and cool inflation expectations. The rupiah pared losses.
Emerging markets from Brazil to India took steps to stem an outflow of capital as concern mounts that developed nations are approaching the beginning of the end of an era pumping unprecedented liquidity.
Indonesia’s rupiah fell to the weakest level since September 2009 after foreign funds pulled money from the nation’s assets amid a delay in cutting fuel subsidies that has undermined investor confidence. Bonds gained.
Bank Indonesia raised the rate it pays lenders on overnight deposits and said it’s ready to buy government debt in the secondary market as Governor Agus Martowardojo moves to boost confidence in the rupiah weeks after taking charge.