Indonesia urges US to provide clarity on stimulus: Report

JAKARTA (AFP) - Indonesia's finance minister has called on the US Federal Reserve to provide more clarity on when it will wind down its stimulus programme, in an interview published on Wednesday.

South-east Asia's biggest economy and other emerging markets have been hit by huge outflows of foreign cash since May when the Fed first signalled it may taper off the US$85 billion (S$108.8 billion) a month bond-buying programme.

Finance Minister Chatib Basri told the Financial Times newspaper that there was a lack of "transparency about the process" as the US central bank moves towards reducing the stimulus.

"People are guessing that the Fed will do the tapering in September. But we're not very sure," the minister added, stressing it was hard for Jakarta to formulate policy given the uncertainty.

His comments came ahead of a G-20 summit in Russia this week, where the deteriorating economic fortunes of emerging markets are expected to figure prominently.

The Fed's easy money policy fuelled an investment spree in developing countries as investors looked for better returns, but the capital flows have now started to dry up as the US economy shows signs of strengthening.

And among countries to suffer the most are those with big current account deficits, such as Indonesia.

Data released this week showed the country's trade deficit unexpectedly hit a record high in July, underscoring the challenge facing policymakers.