JAKARTA (TheInsiderStories) – Bank Indonesia (BI) noted that foreign capital outflow from Indonesia on May 13-16 reached Rp11.3 trillion (US$784.72 million), consisting of Rp7 trillion from the government bond and Rp4 trillion from shares trading.

Governor of Bank Indonesia Perry Warjiyo revealed a large number of foreign capital outflows due to the increase of tension between US and China. “It has led a shifting the capital from Indonesia to developed countries,” Warjiyo said.

He hope that the tension of the trade war between United States (US) and China will be over, so the market can back to normal and reduce the negative impact on developing countries. While the tension has already caused a negative impact on the rupiah exchange rate.

However, BI would be in the market by conducting multiple interventions through domestic nondelivery forward and buying government bonds on the secondary market.

Meanwhile, based on the price monitoring survey, until the third week of May, inflation reached 0.51 percent so the inflation rate in May 2019 would be 3.41 percent. Warjiyo rated the increasing of prices of several commodities such as red chili, garlic, chicken meat, and eggs caused inflation in May 2019.

Although, there are commodities that experience deflation such as shallots, rice, tomatoes, and vegetables. While, in terms of air transportation, it would be recorded to contribute to inflation of 1.04 percent, lower than 2.27 percent in April 2019. BI predicted inflation will be 3.5 ± 1 percent for this year.

Written by Staff Editor, Email: theinsiderstories@gmail.com