Clerks count US dollar notes next to stacks of Indonesian rupiah notes at a money changer shop in Jakarta. Photo: AFP

Indonesia on Friday announced measures to shore up its economy as Asia's emerging nations come under huge pressure from outflows of foreign cash that have sent their stock markets and currencies plummeting.
The move comes as emerging markets around the world start to take action in response to investors fleeing on fears that the US may soon wind down its huge stimulus programme, however analysts and investors were sceptical Friday's announcement would be enough to protect Southeast Asia's biggest economy.
Earlier this week, the Indian central bank said it would pump $1.26 billion into the country's financial system to support the rupee and ailing economy, and on Friday Brazil said had put aside $55 billion to back up the sliding real.
The US Federal Reserve's stimulus scheme, unveiled in September to boost the US economy, has been credited with fuelling a global equity and currency rally as traders sought out better returns in developing economies.
However, with the US economy showing signs of strength the general feeling is that the Fed will start to pull the plug, leading investors to return to the West, where the dollar and equities look like a better and safer bet.
India and Indonesia's economic woes have been compounded by domestic problems, such as slowing growth, rising inflation and a widening current account deficit.
On Friday, Indonesian ministers announced steps aimed at reducing the current account deficit and making investment easier in what is a notoriously difficult business climate.
"We are taking every step to deal with the impact of global turbulence," Finance Minister Chatib Basri told reporters in the capital Jakarta.
"I have always said that bad times make good policies."
The government said it will hike taxes for imports of some luxury goods, reduce oil and gas imports by increasing the use of biodiesel, and boost exports with tax breaks for certain industries, he said.
It also said it was aiming to make investment in projects in the agricultural and mineral sectors easier, while the central bank announced several measures to shore up the rupiah.
Official data last week revealed that the current account deficit widened to $9.8 billion in the second quarter, the biggest shortfall since the Asian financial crisis of the late 1990s.
Analysts were unsure about the proposals.
"I don't believe it will give a boost to confidence in the short term," Purbaya Yudhi Sadewa, Jakarta-based chief economist at Danareksa Research Institute, told AFP, adding that many would not be convinced the government would follow through on the promises.
The plan did not impress investors either, with the Jakarta benchmark index closing down 0.04 after sitting 1.42 percent higher earlier in the day.
The index is down around nine percent this week, while the rupiah is sitting just short of 11,000 to the dollar, its lowest since mid-2009.
Indonesia's woes are mirrored in India, where the rupee on Thursday sank to a record low 65.56 to the dollar, with some market-watchers warning political intransigence in New Delhi could even see the unit fall to 70.
"The only long-term solution -- deep economic, political and social reforms -- is unlikely ahead of the upcoming elections and possibly for years to come," said Credit Agricole economist Dariusz Kowalczyk in a note.
Among other regional markets, Bangkok is down more than six percent, while Manila slid six percent on Thursday, its only trading day so far this week.
However, some observers believe that the tapering off of the Fed's stimulus programme might not be bad news for Asia in the long term.
"The tapering and tightening of US monetary policy, when it occurs, will not be a bad thing for the region's economies," Singapore Finance Minister Tharman Shanmugaratnam said at a regional business forum.
"It is not in anyone's interest, including the emerging economies, for very low global interest rates to continue indefinitely," said Shanmugaratnam.
And Diwa Guinigundo, deputy governor of the Philippines' central bank said: "We should be concerned but we should not be alarmed" about an end to quantitative easing.
"This is something that is driven more by market sentiment rather than the fundamentals of the macroeconomy of the emerging markets."