Perry Warjiyo: US monetary policy normalization and EME policy mix – the Indonesian experience Speech by Mr Perry Warjiyo, Deputy Governor of Bank Indonesia, at the NBER 25th Annual East Asian Seminar on Economics, Tokyo, 20–21 June 2014. * I. *  *  Introduction  Indonesia is weathering relatively well this year the spillovers from the US monetary policy normalization process.
In the period from 1999 to mid-2007 (just prior to the sub-prime crisis) markets almost did not differentiate among European sovereigns. Sovereign yield spreads relative to the German 10-year benchmark ranged from 5 basis points for Ireland to 50 basis points for Greece. The interest rate differentials for Greece, Ireland and Portugal were still below 50 basis points in the spring of 2008.