Indonesian economy looks more fragile as Fed turns hawkish

Jakarta

FOR all the talk of Indonesia's impressive reform momentum and unusually stable markets so far this year, investors have been reminded harshly that the country still remains highly vulnerable to the risks from higher US interest rates.

Global investors, many of whom had assumed the Federal Reserve was in no rush to raise rates, were jolted last week by minutes of its April meeting which put a rate rise on the table as early as June.

Indonesia's rupiah, Asia's second best performing currency until then, …