By IANS,
Jakarta : Indonesia’s rupiah and bond markets remained under selling pressure this week as investors dumped local high-yield assets ahead of next month’s scheduled subsidized fuel price increase, media reports said Saturday.
Economists, bond traders and foreign exchange dealers in Jakarta said the outlook of the two markets for the coming weeks was bleak, reported Xinhua.
“Uncertainty remains high and will remain so in the coming days,” said David Sumual, an economist at Bank Central Asia (BCA) here.
“That would dampen market sentiment on the bond and rupiah market. ”
The government has proposed increasing the subsidized fuel price in April to 6,000 rupiah (about $0.6) a litre from 4,500 rupiah.
The plan still needs approval from lawmakers, and speculation has abounded that it might not happen, creating uncertainty for investors.
“There is talk in the market that the planned fuel price increase will be scrapped or postponed,” said a fixed-income dealer at a Jakarta bank.
The dealer added that political opposition to plan suggested it might not be put into effect until more debates were held to discuss its merits.
The Prosperous Justice Party (PKS) and the Indonesia Democratic Party of Struggle (PDI-P) have voiced their opposition to the subsidy cut, while the Golkar Party and the Democratic Party support the plan.