Indonesia warns of 'spillover' effect of policies

Jakarta

INDONESIA has a blunt message for the US Federal Reserve's Jerome Powell and other global financial chiefs gathering in Bali this week: be mindful of the effects of your policies on emerging economies.

Even though authorities in the South-east Asian nation are taking the right steps to stabilise the currency and keep deficits on the current account and budget under control, Indonesia is still being punished by capital outflows triggered by Fed rate hikes, Finance Minister Sri Mulyani Indrawati said in an interview on Tuesday. Better policy coordination is needed among the International Monetary Fund's 189 members to shield emerging economies, she said.

The US "needs to be very mindful that spillover from the effect of their policies is very real for many countries", she …