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Bank Indonesia Reports That Foreign Portfolio Investments Have Reached IDR 19.2 Trillion

Bank Indonesia Governor Perry Warjiyo expressed gratitude for the continued influx of foreign capital into Indonesia through portfolio investment instruments. He confidently stated that the level of foreign capital inflow via portfolio investments in other countries does not match the achievements seen in Indonesia.

"Alhamdulillah, the confidence of foreign investors in investing in Indonesia continues to grow," he remarked at the Bank Indonesia Central Building in Jakarta on Friday, January 25, 2019. Perry is convinced that investors believe in the ongoing positive trajectory of Indonesia's economy, supported by the policies implemented by the government in collaboration with Bank Indonesia and the Financial Services Authority (OJK).

He elaborated that the total foreign capital inflow through portfolio investments from the beginning of the year until January 24, 2019, has reached IDR 19.2 trillion. Of this amount, IDR 12.07 trillion has been directed to the stock market, while the remainder has flowed into government securities (SBN) and corporate bonds.

However, it is important to note that the IDR 19.2 trillion figure is significantly lower compared to the total capital inflow during the same period last year. The former Bank Indonesia Governor Agus Martowardojo reported that in January 2018, the capital inflow reached IDR 40 trillion.

Furthermore, Perry indicated that the foreign capital inflow into Indonesia has contributed to the stability and even appreciation of the rupiah in recent days. According to data from the Jakarta Interbank Spot Dollar Rate (Jisdor), the exchange rate of the rupiah on January 24, 2019, was at IDR 14,141 per US dollar, reflecting an appreciation of 324 points since the market opened on January 2, 2019, when it was at IDR 14,465 per US dollar.

Perry explained that this foreign capital influx enhances the supply in the foreign exchange market. Additionally, the strengthening of the rupiah is also driven by ongoing economic policies implemented by the government and Bank Indonesia, a lower increase in the Fed Fund Rate, and the continued growth of the foreign exchange market mechanisms.

Tag: Bank Indonesia Financial Services Authority OJK Perry Warjiyo