Bond Bulls See Indonesia Intervention as Mere Speed Bump

Bank Indonesia’s intervention should stabilize its financial markets, so lower bond yields -- even a rate cut -- are still a possibility later this year, according to analysts.

The central bank has been buying local bonds and selling dollars to help prop up the rupiah -- one of the most sensitive currencies in Asia to risk sentiment -- as investors sold high-beta assets on global growth jitters and turmoil in Turkey. While Indonesian assets are once again under pressure, any financial pain is seen as short-lived.