Indonesia Joins India In Begging Fed To Stop Shrinking Its Balance Sheet

It's getting a little tight around the neck for emerging market central bankers.

On the same day that the governor of Malaysia's central bank quit, and just days after Urjit Patel, governor of the Reserve Bank of India, took the unprecedented step of writing an oped to the Federal Reserve, begging the US central bank to step tightening monetary conditions, and shrinking its balance sheet, thereby creating a global dollar shortage which has slammed emerging markets (and forced India into an unexpected rate hike overnight), Indonesia’s new central bank chief joined his Indian counterpart in calling on the Federal Reserve to be "more mindful" of the global repercussions of policy tightening amid the ongoing rout in emerging markets.

As Bloomberg reports, in his first interview with international media since he took office two weeks ago, Bank Indonesia Governor Perry Warjiyo - who bears a remarkable resemblance to what Jamie Dimon would look like if he were about 40 pounds overweight - echoed what Patel said just days earlier, namely that the pace of the Fed’s balance sheet reduction was a key issue for central bankers across emerging markets.

The growing complaints from EM central bankers come at a time when the Fed continues to tighten monetary policy, and with another interest-rate hike expected next week, emerging markets across the globe are bracing for a further selloff. Bank Indonesia has already raised its key rate twice to help bolster its currency, while the Reserve Bank of India on Wednesday became the latest to move, increasing its policy rate by 25 basis points to 6.25%, surprising a majority of analysts who expected no change.