- The Rupiah staged a relief rally following BI’s surprise rate hike, coinciding with the decline in global oil prices, even as foreign capital inflows remained limited.
- Market movements last Friday appear to support the argument that fiscal concerns, rather than low yields, are the primary factor behind foreign investors’ subdued appetite for Indonesian sovereign bonds.
- The tension between foreign capital inflows and the government’s fiscal posture highlights the trade-off between pursuing higher GDP growth and maintaining financial-market stability.
