Indonesia is the latest country in danger of being tagged with the ¡°Japanification¡± label.
Not for a battle with deflation or sluggish growth, and certainly not for tough demographics. The potential designation comes courtesy of the bond market.
Bank Indonesia¡¯s intervention to stem a downdraft in the rupiah has, in the words of top officials, been ¡°quite bold.¡± While the actions have alleviated the currency¡¯s decline, the central bank¡¯s holdings of government debt have swollen significantly and now account for about 25% of the total. It¡¯s not inconceivable that the figure could rise to 30%, analysts and investors in Jakarta told Bloomberg News. The authority has become the biggest owner, surpassing local banks and foreigners.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.