Market Overview

Indonesia's Mattress Gets Bigger

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Indonesia is sitting on a substantial amount of foreign reserves. Indonesian foreign reserves increased by 21% this year, up to $116.5 billion, according to Jakarta Globe.

The Indonesian Central Bank cited continued foreign investor demand for Indonesian assets as the primary catalyst.

The Indonesian currency--the rupiah--has strengthened 4.6% in 2011 and may strengthen further if Indonesia' foreign reserves continue to expand.

Indonesia is just one more Asian country sitting on a stockpile of reserves.

Investors may be seeking higher returns in emerging Asian economies, as sluggish economic growth in the world's developed countries have led central banks around the globe to slash interest rates.

Investors considering a play on Indonesia might look at Market Vectors Indonesian Index (NYSE: IDX). IDX attempts to return a value corresponding to the broader Indonesian economy and may do well if the Indonesian economy continues to see significant foreign capital inflows.

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