JakartaPost – Satria Sambijantoro And Amahl S. Azwar – Bad Policies Could Cause A Repeat Of 1998 – 2 September 2013

Jakarta Post

Indonesia has not come up with “good policies” quickly enough as its current account deficit widens and its currency continues to plummet.

And the failure by policy makers to deliver the right responses to investors could lead the country to a repeat of the traumatic 1998 financial crisis, during which the economy also saw an overshooting exchange rate, slumping foreign exchange (forex) reserves, high inflation and a sharp slowdown in growth.

Former Bank Indonesia (BI) governor Darmin Nasution once blamed the deficit, which has occurred for seven consecutive quarters since late 2011, on President Susilo Bambang Yudhoyono’s unwillingness to curb fuel subsidies that had enlarged oil imports and created an unnecessarily high dollar demand.

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