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Indonesian Markets Get Hammered by Emerging-Market Contagion

  • Nation’s key equity index drops the most since November 2016
  • Emergency rate hike seen as possible to shore up rupiah
Bloomberg business news
Indonesia’s central bank is intensifying its fight to protect the nation’s currency and bonds. Kathleen Hays reports.(Source: Bloomberg)
Updated on

Asia’s fifth-biggest economy saw its stock market walloped on Wednesday as investors girded for the possibility of more interest-rate hikes to safeguard Indonesia’s rupiah, which has fallen to its weakest since 1998.

The benchmark Jakarta Composite Index dropped 3.8 percent at the close, the biggest one-day slide since November 2016. The gauge is down 19 percent in dollar terms for the year so far, factoring in the slump in the rupiah against the U.S. currency. Yields on two-year government bonds have surged more than 60 basis points this week.