Bank Indonesia Surprises on Rates to Boost Rupiah Appeal

Indonesia raised interest rates to the highest level since 2009 to sustain overseas demand for its currency even as it risks hurting growth in Southeast Asia’s biggest economy.

Bank Indonesia is seeking to maintain foreign interest in its assets, which has helped fuel growth and overcome a lack of structural reforms, said Steve Hanke, professor of applied economics at Johns Hopkins University in Baltimore and an adviser to former president Suharto during the Asian financial crisis.