Indonesia

Following rapid currency depreciation and threat of large capital outflows, the government of Indonesia has taken measures to restrict foreign currency transactions and increase overall currency security.

Investors in Indonesia's capital markets are carefully monitoring and awaiting the finalisation of a corporate deal that they hope will result in an end to the nearly month-long speculation and turmoil surrounding the suspension of trading in the shares of Bakrie & Brothers, the country's largest company by stock market capitalisation.

Faced with a likely decline in exports in some of its major markets, the Indonesian government is preparing measures to boost its balance of trade by making it more difficult to import various goods that can be produced domestically.

The manufacture of footwear and textiles has long been an important and growing source of exports and employment for Indonesia.

While Indonesia's central bank, Bank Indonesia (BI), has decided to raise its benchmark interest rate for the fifth time this year to curb inflation, some in the business community are worried that increasing borrowing rates could stifle companies' ability to secure funds for investment and expansion.

The House of Representatives endorsed last week a new set of tax laws that is expected to encourage investment in Indonesia as well as benefit the individual taxpayer.