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Indonesia Markets Unnerved as Finance Minister’s Removal Raises Policy Concerns

1. Indonesia's new finance minister faces market instability and investor concern. 2. The rupiah weakened, trading around 16,430 to the dollar amid fiscal worries. 3. Political pressures could further strain Indonesia's fiscal and monetary policies. 4. Analysts expect increased volatility due to social tensions and populist programs. 5. Investor confidence hinges on the new finance minister's commitment to discipline.

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FAQ

Why Bearish?

The uncertainty created by the finance minister's ousting raises fears of undisciplined fiscal policy, which historically leads to currency depreciation and market instability, similar to past financial crises in emerging markets.

How important is it?

The ousting of the finance minister directly impacts Indonesia's financial stability and investor sentiment, which could spill over to SG due to regional economic ties.

Why Short Term?

Immediate reactions are likely as investors digest the political changes and their implications on fiscal policies, as seen in recent events from similar geopolitical shifts.

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