The Indonesian rupiah has dropped back in recent weeks amid fears over the government’s plans for the central bank to finance a large part of the budget deficit for this year. The uncertain outlook for the currency is the key reason we think Bank Indonesia will take a cautious approach over the coming months. Despite the poor outlook for growth, we have just one further 25bp rate cut pencilled in for the rest of the year.
All the headlines in Korea after the publication of the Q2 national accounts figures earlier this week were about the historic fall in GDP. However, relative to other countries both in Asia and the rest of the world, the economy is holding up pretty well.
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