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Indonesia May Need to Follow Fed Hikes, Basri Says

  • Ex-finance chief warns of impact on currency stability
  • Trade war between U.S. and China to hurt Indonesia’s economy
Chatib Basri

Chatib Basri

Photographer: Dimas Ardian/Bloomberg

Corrected

Indonesia’s central bank will need to tighten monetary policy to protect the currency if the U.S. raises interest rates more than three times this year, former Finance Minister Chatib Basri said.

Bank Indonesia, which has so far resisted raising rates, has been vigorously intervening to protect the rupiah which fell to a two-year low last month. Policy makers are bracing for further volatility amid forecasts for more rate hikes in the U.S. this year.