JAKARTA -- Despite the country reaping huge benefits from falling oil prices, Indonesia's financial markets have hardly budged. Stocks in 2014 have set record highs on expectations of reform by President Joko Widodo, but investors remain cautious about the economy's prospects.
The cheaper oil could not have come at a better time for Indonesia, a producer of crude but a net importer. When Widodo announced he would raise gasoline prices last November, many citizens took to the streets in protest, in some cases smashing traffic lights and setting tires on fire. Only two months later, people cheered as gasoline prices were back down to 6,600 rupiah ($0.53) per liter, almost the level prior to the hike.