Bank Indonesia Foreign Inflows Reach US$9 Billion
Investor Confidence Indonesia continued to strengthen as Bank Indonesia’s recent monetary tightening attracted approximately US$9 billion in foreign portfolio inflows. The capital entered government bonds and Bank Indonesia Rupiah Securities (SRBI), reflecting growing confidence in the country’s economic outlook.
Bank Indonesia raised its benchmark interest rate by a total of 100 basis points within one month. The BI Rate increased from 4.75% to 5.75% through several policy meetings held in May and June.
According to Senior Deputy Governor Destry Damayanti, the inflows reflect growing confidence from international investors. She also expects stronger confidence among domestic market participants.
Bank Indonesia Expands Liquidity Support
Bank Indonesia expanded several liquidity measures to support Bank Indonesia foreign inflows and maintain market stability.
Besides raising interest rates, Bank Indonesia continues to strengthen liquidity across the financial system. The central bank has reopened repurchase agreement (repo) auctions with maturities ranging from three to twelve months. This measure helps banks maintain sufficient liquidity.
Furthermore, Bank Indonesia expanded liquidity through its monetary operations. The expansion reached approximately Rp1,000 trillion by the end of June, compared with Rp600 trillion at the end of May.
The central bank also maintained accommodative macroprudential policies. It optimized the Macroprudential Liquidity Incentive Policy (KLM) to encourage bank lending to priority sectors while supporting financial stability.
Government Aims to Sustain Bank Indonesia Foreign Inflows
Deputy Finance Minister Suahasil Nazara said the government continues to engage with investors. Officials regularly explain Indonesia’s economic fundamentals and fiscal policies to maintain market confidence.
He added that transparent communication helps investors better understand government programs and Indonesia’s long-term economic outlook.
Strong foreign capital inflows suggest that investor sentiment remains positive despite global uncertainty. Stable monetary policy and clear government communication continue to support confidence in Indonesia’s financial markets.
Outlook
Continued Bank Indonesia foreign inflows could help strengthen financial market stability and support the rupiah over the coming months.
The recent increase in foreign capital inflows suggests that investors continue to recognize Indonesia’s economic resilience despite ongoing global uncertainty. While market conditions may remain dynamic, coordinated monetary and fiscal policies are expected to support financial stability and maintain investor confidence.
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Source: Investor Daily