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Argentina should set alarm bells ringing in Asia

Indonesia's interest rate rise highlights need for urgent defensive action

| Indonesia
Indonesia's central bank was quick to take a defensive action.   © Reuters

Argentina's return to financial chaos might seem remote to Indonesia's Joko Widodo, but the rupiah's decline tells a different, and more troubling, story. And not just for Jakarta, but New Delhi and perhaps Beijing as well.

Rising U.S. yields combined with President Donald Trump's trade war antics have investors turning away from emerging markets. Indonesia is taking the biggest knocks in Asia, with the rupiah plunging below the psychologically key level of 14,000 to the dollar, falling 3.7% this year to its lowest level since October 2015.

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