Prabowo Is Testing Investors’ Trust With His Finance Plan

Faced with a hefty bill for his big projects, Indonesia’s president has turned to a trusty source. The central bank will lend a helping hand. Not just through cutting interest rates but by alleviating the cost of at least some borrowing on the part of Prabowo Subianto’s administration. The cavalry has arrived, again.

This might not sound like a policy revolution. But it represents a shift — and a tricky one to get right. The more so given Prabowo’s removal this week of Sri Mulyani Indrawati, who served as finance minister under three presidents and was a well-respected figure. Her successor doesn’t yet have the same cachet in capital markets. Authorities intervened to prop up the rupiah and government bonds on Tuesday; the currency is the second-worst performer in Asia this year.