"The upward trend in foreign investment inflows in the country through state bonds (SUN) is one of the factors behind the rupiah strengthening significantly against the US dollar," money market observer Rully Nova of Bank Himpunan Saudara said here on Wednesday.
Data from the Directorate General of Financing and Risk Management at the Finance Ministry showed that the foreign holding of government bonds rose to Rp588.71 trillion as of February 8, 2016, compared to Rp558.52 trillion late last year.
The foreign holding represents 39.37 percent of the total outstanding government bonds, valued at Rp1,495.45 trillion.
Rully said the upward trend of foreign investment inflows is attributable to the prospects of the countrys economic fundamentals this year which will be better than in the previous year.
"It is expected that the economy will grow in the first quarter of 2016. The trend of economic growth is expected to continue in 2016," he said.
Meanwhile, the governments decision to grant tax amnesty to Indonesian taxpayers abroad will have a positive impact on state revenues. As such, they can report their income to the government and pay taxes.
"The potential rise in government revenues can be used to raise infrastructure development fund which will eventually support economic growth in the medium and long run," he said.(*)
Editor: Heru Purwanto
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