Indonesia’s rupiah rebounds but rate rises threaten middle class

Indonesia’s Rupiah rallied from a historic low this week, its stock market surged and a closely watched sovereign wealth fund bond offering was oversubscribed, offering Southeast Asia’s largest economy a reprieve after months of asset pressure.But economists have warned that the relief may come at a cost as the same forces helping stabilise the Rupiah, including higher Interest Rates and easing external pressure, could deepen financial strain on the country’s shrinking middle class and weigh on growth.The Rupiah was trading at 17,762 to the US dollar as of Wednesday, a rebound from its historic low of 18,000 the previous week. The Indonesia-composite-index" class="entity-link entity-topic" data-entity-id="147983" data-entity-type="topic">Indonesia Composite Index also rallied by as much as 5 per cent on Monday after market turbulence had wiped more than 32 per cent off the stock market’s value over the previous six months.