Indonesia stocks sink most in nearly two years as emerging markets slump

JAKARTA (Reuters) - Indonesian stocks tumbled the most in nearly two years on Wednesday and authorities intervened “decisively” to support the currency and bond markets as a global rout in emerging market assets intensified.

Indonesian President Joko Widodo deliver a speech in front of parliament members at the parliament building in Jakarta, Indonesia, August 16, 2018. REUTERS/Beawiharta

President Joko Widodo blamed “a barrage of external factors” for the rupiah’s fall to 20-year lows and said the priority was to increase investment and exports to contain the current account deficit.

“There are only two key (things) - investments must continue to increase and exports must also increase so (we) can resolve the current account deficit,” Widodo said in comments posted on the cabinet secretary’s web page.

Indonesia’s current account deficit was 1.7 percent of gross domestic product last year, but is expected to widen to around 2.5 percent in 2018 as economic activity increases, Bank Indonesia (BI) has said.

Indonesia will also raise import taxes on 1,147 items, most of them consumer goods ranging from cosmetics to luxury cars, in a bid to cut imports, Finance Minister Sri Mulyani Indrawati said.

GRAPHIC: Indonesia's external debt - tmsnrt.rs/2LYDjbC

GRAPHIC: Asian currencies YTD performance - tmsnrt.rs/2wJI8AC

GRAPHIC: Asian currencies YTD and yields - reut.rs/2oILzDu

Indonesian assets have sold off as investors flee emerging markets, with the vulnerability of Southeast Asia’s big....

read more from reuters.com