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Special Report

Indonesia: A Breakout Or Fakeout?

by Arthur Budaghyan, Chief EM/China Strategist   Ayman Kawtharani,   

Indonesia has been fighting the Impossible Trinity, a battle that cannot be won. The central bank will continue printing rupiahs and the currency will depreciate further. Eventually rupiah depreciation will push up interbank rates, and Indonesia's credit cycle and economic growth will stumble. Continue shorting the rupiah, underweighting Indonesian stocks and sovereign credit, and shorting long-term (5-year) local government bonds.

BCA Research | Emerging Markets Strategy

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