Indonesia rupiah rebounds, rate risks loom

Indonesia's rupiah has rallied from a historic low this week, with the stock market surging and a sovereign wealth fund bond offering oversubscribed, offering Southeast Asia's largest economy a reprieve after months of asset pressure. However, economists warn the relief may come at a cost, as higher interest rates and easing external pressure could deepen financial strain on the country's shrinking middle class. The same forces stabilizing the rupiah risk weighing on household consumption and economic growth.