Singapore is destroying indonesua economy.

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https://www.ft.com/content/f8fb7ef5-03df-4c09-bca9-2bd4beda4e20?syn-25a6b1a6=1

MENUFinancial TimesSign InIndonesian economyAdd to myFTIndonesia unexpectedly raises interest rate to support rupiahCentral bank’s off-cycle move follows rout in currency and stock marketIndonesia’s rupiah has been trading at record lows against the US dollar © Dimas Ardian/BloombergIndonesia unexpectedly raises interest rate to support rupiah on x (opens in a new window)Indonesia unexpectedly raises interest rate to support rupiah on facebook (opens in a new window)Indonesia unexpectedly raises interest rate to support rupiah on linkedin (opens in a new window)Indonesia unexpectedly raises interest rate to support rupiah on whatsapp (opens in a new window)SaveDiana Mariska and A. Anantha Lakshmi in JakartaPublishedJUN 9 2026UpdatedJUN 9 2026, 16:2811Print this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Indonesia’s central bank has unexpectedly raised its benchmark interest rate to prop up the rupiah which is trading at record lows, as a sell-off rocks assets across south-east Asia’s largest economy.Bank Indonesia increased the rate by 0.25 percentage points on Tuesday to 5.50 per cent in an off-cycle move. This followed a 0.50 percentage point rise just three weeks ago in what was its first rate increase in two years.In a statement, the central bank said it was necessary “to take further steps to strengthen the stabilisation of [the] rupiah exchange rate by increasing yields and a number of other incentives to encourage the inflow of foreign investment”. The bank said the currency was performing “worse than expected” in the three weeks since its previous rate rise.The off-cycle move “is also taken to maintain the external resilience of the Indonesian economy and to achieve the inflation targets for 2026 and 2027”, it said.The rupiah, which had fallen to a record low of Rp18,188 against the dollar on Tuesday, strengthened 0.9 per cent to Rp18,030.5 following the rate move. It has weakened about 9 per cent this year, making it one of Asia’s worst-performing currencies.Indonesia’s benchmark stock index has fallen nearly 40 per cent this year, making it one of the worst-performing equity markets globally, and is trading near multiyear lows.Foreign investors have increasingly been exiting Indonesia amid concerns over President Prabowo Subianto’s policymaking. The former general has pursued expensive populist policies such as a $15bn free school meals programme, straining a state budget that is struggling to boost its revenue.He has also imposed more state control on the private sector, worrying foreign and domestic investors. Last month, Prabowo announced plans to centralise commodities exports through a state-run export agency that would have an impact on the resource-rich country’s key exports, including coal and palm oil.Global index provider MSCI had warned about Indonesia’s investability earlier this year, citing concerns over the high concentration of shareholdings