JAKARTA, KOMPAS.com – Indonesia’s central bank said on Tuesday that throughout the year foreign capital inflows could reach $19.6 billion, or higher than the initial estimation at $19.1 billion.
“We expect foreign capital inflows of $19.6 billion after last year’s capital flow reached $9.45 billion,” Bank Indonesia (BI) Governor Perry Warjiyo told House of Representatives Commission XI overseeing financial affairs via teleconference on February 9.
“The capital flow of $19.6 billion could make Indonesia as the second-largest destination in attracting foreign capital after China,” Perry added.
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He said that the capital flow of $19.6 billion would come from a portfolio investment, which excludes foreign investment. He said that the new Job Creation Law could boost foreign investment in the country.
The conditions on the domestic and international financial market could also support the foreign capital inflows. While other aspects include global liquidity, low-interest rate trends in developed countries, and a low-risk premium.
“This could help us to maintain external stability, including the exchange rate and managing the economy,” Perry said.
The foreign capital inflows have started at the beginning of the year. In the first of week February alone, the foreign capital inflows reached 12.12 trillion rupiahs ($867.3 million).
This came from the purchase of government securities (SBN) amounting to 7.91 trillion rupiahs ($565.7 million) and from the stock market of 4.21 trillion ($301.1 million).