Summary
Indonesia's central bank raised interest rates by 25 basis points on Tuesday (Jun 9) in an unexpected off-cycle rate hike, taking the benchmark rate to 5.50 per cent as it moves to stabilise the rupiah, which has hit a series of record lows. The rupiah has been under pressure due to a wide range of investor worries, including President Prabowo Subianto's big spending plans and a ballooning fuel subsidy budget following the Iran war, along with doubts about the central bank's autonomy and controversial new commodity export policies. But will higher interest rates be enough to bring investors back, amid a crisis of confidence seen across Indonesia's financial assets? CNA’s Olivia Marzuki explains.
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