JAKARTA - Bank Indonesia (BI) said the capital inflow to the domestic financial market during the first quarter (Q1) of this year reached $4.9 billion. Executive Director of the Department of Economic and Monetary Policy BI Juda Agung said, about $3.7 billion of which came into government securities, while the rest went to the stock market, and BI certificates.
Juda said that since the end of the year to date, the rupiah exchange rate rose 3.96 percent to Rp 13.260 per US dollar. From the global side, the increase in inflow was driven by monetary policy easing by developed countries such as Europe and Japan through application of negative interest rates.
On the domestic front, the gains driven by investor perception that Indonesia’s economy is improving. This was in line with the reduction in the BI rate in the first three months of this year and the launch of government’s policy packages to improve the investment climate and accelerating the implementation of infrastructure projects.
In addition, the strengthening of the rupiah was also driven by the increased supply of foreign currency export-oriented domestic corporation. BI noted, a number of Indonesia’s export commodity prices have improved, such as palm oil, rubber, and tin, although world oil prices tend to decline. (*)