JAKARTA: Indonesia today announced measures to shore up its economy as Asia's emerging nations come under huge pressure from outflows of foreign cash that have sent their stock markets and currencies plummeting.
The move comes as emerging markets around the world start to take action in response to investors fleeing on fears that the US may soon wind down its huge stimulus programme.
However analysts and investors were sceptical if today's announcement would be enough to protect Southeast Asia's biggest economy.
Earlier this week the Indian central bank said it would pump USD 1.26 billion into the country's ailing financial system to support the rupee and ailing economy, and today Brazil said had put aside USD 55 billion to back up the sliding real.
The US Federal Reserve's stimulus scheme, unveiled in September to boost the US economy, has been credited with fuelling a global equity and currency rally as traders sought out better returns in developing economies.
However, with the US economy showing signs of strength the general feeling is that the Fed will start to pull the plug, leading investors to return to the West, where the dollar and equities look like a better and safer bet.
India and Indonesia's economic woes have been compounded by domestic problems, such as slowing growth, rising inflation and a widening current account deficit. Today Indonesian ministers announced steps aimed at reducing the current account deficit and making investment easier in what is a notoriously difficult business climate.
"We are taking every step to deal with the impact of global turbulence," Finance Minister Chatib Basri told reporters in the capital Jakarta.
"I have always said that bad times make good policies." The government said it will hike taxes for imports of some luxury goods, reduce oil and gas imports by increasing the use of biodiesel, and boost exports with tax breaks for certain industries, he said.
Official data last week revealed that the current account deficit widened to USD 9.8 billion in the second quarter, the biggest shortfall since the Asian financial crisis of the late 1990s.
indiatimes.com
The move comes as emerging markets around the world start to take action in response to investors fleeing on fears that the US may soon wind down its huge stimulus programme.
However analysts and investors were sceptical if today's announcement would be enough to protect Southeast Asia's biggest economy.
Earlier this week the Indian central bank said it would pump USD 1.26 billion into the country's ailing financial system to support the rupee and ailing economy, and today Brazil said had put aside USD 55 billion to back up the sliding real.
The US Federal Reserve's stimulus scheme, unveiled in September to boost the US economy, has been credited with fuelling a global equity and currency rally as traders sought out better returns in developing economies.
However, with the US economy showing signs of strength the general feeling is that the Fed will start to pull the plug, leading investors to return to the West, where the dollar and equities look like a better and safer bet.
India and Indonesia's economic woes have been compounded by domestic problems, such as slowing growth, rising inflation and a widening current account deficit. Today Indonesian ministers announced steps aimed at reducing the current account deficit and making investment easier in what is a notoriously difficult business climate.
"We are taking every step to deal with the impact of global turbulence," Finance Minister Chatib Basri told reporters in the capital Jakarta.
"I have always said that bad times make good policies." The government said it will hike taxes for imports of some luxury goods, reduce oil and gas imports by increasing the use of biodiesel, and boost exports with tax breaks for certain industries, he said.
Official data last week revealed that the current account deficit widened to USD 9.8 billion in the second quarter, the biggest shortfall since the Asian financial crisis of the late 1990s.
indiatimes.com
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