Acombination of rising fuel prices, double-digit inflation and political jockeying ahead of national elections next year is putting lenders on alert in Indonesia, the largest economy in south-east Asia. At the same time, the global rally in commodity prices is creating plenty of bankable winners and spreading wealth across the resource-rich archipelago.
For banks in Indonesia with solid balance sheets – and that applies to most of the private and state-owned lenders that emerged from the wreckage of the 1997/98 Asian meltdown – the volatility appears to be manageable.
