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Inflation in indonesia nearly reached a two-year high. It rose from 5.30 to 5.91 in only 1 month. This jump in inflation is due to climbing prices in staple foods. Analysts are warning that indonesia could see capital outflows if the central bank maintains its benchmark policy. This will provide an interesting test to indonesias economy.

The author of the article talks about Indonesia. It focuses on the attempts of central bank of Indonesia to defend the rupiah, "which has slid some 12 percent so far this year amid a global emerging markets rout." The currency has fallen to its weakest levels since April 2009, as worries about the country's current account deficit and high inflation rate have sparked a sell-off of Indonesian assets. Sudden declines in rupiah and local stocks over the last week, necessitated central bank to take part. Emergency fiscal and monetary policies that were announced last week, had done little to improve the current situation. Therefore, currently to protect its currency, Indonesian central bank attempts to raise the rates.

Brazil's central bank announced a $60 billion program on Thursday aimed at halting the slide of the Brazilian real, making Brazil the latest emerging economy to seek to prop up its sagging currency. Similar moves have been made by central banks in Indonesia and Turkey. I chose this article because it covers one of the most important aspects of foreign currency, which is the depreciation of it. The consequences of having a weak currency could be severe, as the value decreases in comparison with other currencies, for example Euros, therefore it will take more Brazilian Reals to buy Euros (1 Euro= 2.98804259 Brazilian Reals). In this case this depreciation of the currency has led to some action from the Central Bank in order to boost up the value of the currency. This does not only affect Brazil, it also happens to other emergent economies such as India.

I have chosen this article because it is really related to our current topic of economic development. It is an article about how the change in the Indonesian law will allow the government to impose import substitution and thus reduce the reliance of the Indonesian economy on the imports from foreign countries. This may be very positive for the Indonesian economy because it will force domestic producers to be more efficient and employ more factors of production, what will probably lead to economic growth and decrease in unemployment.

With the implementation of the newly approved Industrial Law, Indonesia will have a strong legal base to promote import substitution as well as downstream industries in efforts to reduce the manufacturing sector's heavy reliance on imports of components and machinery. With the new industrial law the manufacturing sector was expected to grow by up to 6.8 percent and create 400,000 new jobs in 2014. The import substitution will have a profound effect and help the economy grow and develop.