Indonesia Fuel Hikes: A Boost For Reform

March 2005 | Market Strategy

Indonesian President Susilo Bambang Yudhoyono's (SBY) decision to raise fuel prices by 29% from March 1 was a bold move, given widespread public opposition to such increases. It shows that Yudhoyono is willing to make unpopular decisions for the greater economic good, and therefore enhances his reformist reputation. This in turn should boost investor confidence going forward. Indeed, the JKSE equity index initially jumped back towards recent record highs above 1,100, while the spread on the US$ 2014 bond has narrowed to a record low of 195bps+USTs. One of our key concerns about the fuel price hike was that it

If you would like to subscribe to Emerging Markets Monitor and gain instant access to this article, please click here to subscribe.

If you would like to take a trial to Emerging Markets Monitor please click on the trial link below.