Foreign capital inflow reaches Rp220.9 trillion until November

Foreign capital inflow reaches Rp220.9 trillion until November

Bank Indonesia Governor Perry Warjiyo. ANTARA/Indra Arief/AK

Foreign capital portfolios entering Indonesia were embedded in government's debt papers (SBN) worth Rp174.5 trillion and Rp45.3 trillion in stock instruments and corporate bonds worth Rp1.6 trillion
Jakarta (ANTARA) - Bank Indonesia (BI) recorded a portfolio of foreign capital inflow from the beginning of January 2019 to November 21, 2019 of Rp220.9 trillion (year to date/ytd). Foreign capital portfolios entering Indonesia were embedded in government's debt papers (SBN) worth Rp174.5 trillion and Rp45.3 trillion in stock instruments and corporate bonds worth Rp1.6 trillion, BI Governor Perry Warjiyo said in Jakarta Friday.

"This incoming foreign capital is far greater than last year's foreign capital," Warjiyo said.

But, during the past week until November 21, 2019 (week to date/wtd), there was an outflow of funds worth Rp2 trillion. This came from Rp1 trillion in government's debt papers, Rp400 billion in shares, and through Rp500 billion in corporate bonds, Warjiyo acknowledged.

The exit of funds is more due to seasonal factors according to the transaction activities in the market, he claimed and added that the outflow of funds is for short-term investments.

The outflow in the past week was caused by the attitude of investors who determine the direction of investment by examining several factors.

The first factor the investor calculates is the investment profits that have been obtained, and the second is the factors that occur in global economic activity, especially the development in the trade conflicts between the US and China.

The process of resolving trade disputes between the two giant economies has made investors more cautious.

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"In the global world, we hear (US President) Trump and (President of China) Jinping want to agree but until now there has been no sign of agreement. So investors feel there are signs of risk in the global market. Then, they take out their funds," Warjiyo remarked.

However, the outflow was only temporary. At the beginning of the year, investors will re-invest their capital in various countries, including Indonesia, according to Perry.

The high level of foreign capital also supports the rupiah exchange rate on the financial market. The exchange rate is between Rp14.095 and Rp14.100 per US dollar at this time. The rupiah is still moving according to the market mechanism naturally, he stated.

"We will be in the market and prepare stabilization measures. Thank God, supply and demand in the market are going well," he said in conclusion. (INE)

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