Indonesia Intensifies Efforts to Stabilize Economy Amid Dollar Strength

Indonesia looks to protect its economy from the adverse effects of a strong U.S. dollar. 

The rupiah faces severe depreciation. Already, it’s at a four-year low after dropping more than 2.5% against the dollar in April. 

Officials are using fiscal policy as a shock absorber and stepping up foreign exchange interventions to stabilize the currency.

The central bank is limiting the amount state-owned companies can buy in dollars. Additionally, it has required companies that export natural resources to bring their earnings in dollars back to Indonesia.

Looking ahead, there is a possibility of a significant interest rate hike. While the central bank maintains a key rate of 6%, it signals openness to future increases to manage inflation and support the rupiah.

For more information, read the full article on Bloomberg.