JAKARTA (TheInsiderStories) – Foreign capital inflows to the Indonesian financial market doubled to over Rp46 trillion (US$3.6 billion) in the year ending January 26, compared with Rp17 trillion (US$1.36 billion) in the same period last year, according to Bank Indonesia (BI).
With the increasing foreign capital inflows, the central bank believes the rupiah`s exchange rate will remain stable despite the onslaught of external risks.
BI Governor Agus Martowardojo said the rise in foreign capital inflows was fueled by the country`s strong economic fundamentals as reflected in the low inflation rate of 3.61 percent year-on-year in 2017 and the current account deficit projected to reach less than 2 percent of the national gross domestic product in 2017.
In addition, the rising foreign capital inflows were also related to the country`s sovereign rating. Indonesia won a second sovereign rating upgrade last year, with Fitch Ratings raising its assessment to the second-lowest investment grade.