Indonesia's default risk surges amid concerns of fund exit

Jakarta

THE cost to insure Indonesia's bonds against default rose to the highest this year as the falling rupiah and accelerating inflation fuelled concern foreign investors will pull out of the country.

Five-year credit default-swaps on the debt jumped 19 basis points to 180 in the past two weeks. Malaysia's risk rose the same amount to make the nations the worst performers in Asia. Central bank governor Agus Martowardojo said on Monday that the authority sees opportunities to buy the notes when yields rise.

Inflation will remain above 7 per cent through September, Bank Indonesia foreca…