| Business | October 17, 2008 11:06 AM EST |
| Indonesia loosens rules, resumes trading |
| By Luisana Suegart from Markets.com |
Banks in Indonesia will ease accounting rules and be allowed to set aside smaller reserves in the country’s efforts to restore investor confidence.
Finance Minister Sri Mulyani Indrawati announced a plan that includes a 1.58 percent decrease in the reserve requirement and raises the limit for stock purchases to 20 percent of outstanding shares. Indrawati said the plan is designed to “calm the markets”.
Trading at the Indonesian stock exchange will resume tomorrow being suspended Wednesday; of the Asian markets, the Jakarta was yesterday’s biggest loser with a drop over 10 percent. This week, the exchange fell 21 percent.
Senior Deputy Governor Miranda Goeltom said the reserve requirement reduction will bring the ratio down to 7.5 percent, a measure that will help credit growth increase 27 percent this year.
Asian markets saw a turnaround on Thursday after central banks South Korea, Taiwan and Hong Kong cut their benchmarks rates. The move mirrored those made by the U.S. Reserve, the European Central Bank, and four other central banks on Wednesday.
The rupiah, down 3.5 percent in the last month, rose 0.2 percent against the dollar by closing time in Jakarta.
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