DBS Group Holdings Ltd. got approval from Indonesia’s central bank to acquire a $2.75 billion stake in PT Bank Danamon Indonesia, giving Southeast Asia’s largest lender less control than it had sought.
Indonesia posted the smallest current-account deficit in a year last quarter, and the Southeast Asian nation’s central bank said capital inflows will help to further narrow the gap and support the rupiah.
DBS Group Holdings Ltd., Southeast Asia’s largest bank, unexpectedly posted an 11th straight increase in quarterly profit as fees, commissions and trading income rose, helping offset narrower lending margins.
President Susilo Bambang Yudhoyono’s decision to opt for an acting finance minister to replace Agus Martowardojo threatens to cloud the policy outlook as Indonesia struggles to revamp its fuel-subsidy program, step up infrastructure investment and damp price pressures.
Indonesia may face more pressure than other Asian nations to raise borrowing costs this year after keeping its benchmark interest rate unchanged tomorrow, as plans to cut fuel subsidies threaten to spur inflation.
Indonesia held its benchmark interest rate for a 14th consecutive meeting as plans to cut fuel subsidies boost inflation risks, reducing scope for monetary easing even as falling exports crimp economic growth.