Indonesia Has Room to Cut Rates in 2H, Says Ashmore Asset Management’s Kumar

The video discusses the conditions necessary for a rate cut in Indonesia, focusing on the trade balance deficit and historical trends. It highlights the need for reforms in the oil, gas, and labor sectors to attract foreign direct investment (FDI). The impact of interest rate hikes, not driven by inflation but by sentiment and portfolio investments, is analyzed. The video also explores the potential for increased investment flows into emerging markets, particularly Indonesia, due to its high growth rate.

What is a key factor that could lead to a rate cut in Indonesia in the second half of 2019?

• A narrowing or surplus in the trade balance deficit

• A rise in unemployment rates

• A significant increase in inflation

• A decrease in foreign direct investment

How long does it typically take for Indonesia to recover from a trade balance deficit?

• Two years

• Four years

• One year

• Three years

What was the primary reason for the interest rate hikes mentioned in the transcript?

• To reduce unemployment

• To combat high inflation

• To increase consumer spending

• To address portfolio investment sentiments

What is the expected outcome if external environments ease?

• Complete withdrawal of EM fund flows

• Stagnation of EM fund flows

• Increase in EM fund flows

• Decrease in EM fund flows

Why is Indonesia considered attractive for investment flows?

• Low inflation rates

• Low labor costs

• High growth numbers in Asia

• Stable political environment