In the chaos of Thursday's market volatility and mounting concern
over the EU's financial situation, Indonesia gave investors a rare
chance to cheer about something good, even as Indonesia's exchange
traded fund (
) was sold off with the broader market.
Aloysius Unditu and Novrida Manurung of
, Indonesia's central bank was able to leave its benchmark interest
rate at a record low for the ninth straight month because a
stronger currency kept inflation under 4%. [
Indonesia: Destined for Greatness?
Although Indonesia is not the only Asian country doling out good
economic news, it's a standout because other nations from India to
China are raising rates or increasing reserves as a remedy for
If inflation remains within the expected range of 4% to 6%, the
central bank will likely keep interest rates low through the end of
the year, said Senior Deputy Governor Darmin Nasution.
A low interest rate environment will continue to boost consumer
spending, exports and business investment in Indonesia.
Aloysius Unditu and Michael Munoz of Bloomberg
report that car sales rose 74% in the first quarter compared to a
year ago while cement consumption rose 14%. Exports surged to $35.4
billion from $23.03 billion, and investment totaled $4.6 billion
with roughly 84% of that coming from foreign investors. [
6 Reasons Indonesia Was Hot in Q1.
Indonesia is also experiencing the most stable political climate
since the ousting of dictator Suharto in 1998. In addition,
President Yudhoyono is committed to delivering an average annual
growth of 6.6% over the remainder of his term ending in 2014. That
means double the spending on roads, seaports and airports to the
tune of $140 billion over the next five years.
There's a lot to love about Indonesia.
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Sumin Kim contributed to this article.