Sri Mulyani said foreign funds of IDR 82.36 trillion entered the financial market

Jakarta ( – Minister of Finance (Menkeu) Sri Mulyani revealed that as much as IDR 82.36 trillion foreign funds entered the Indonesian financial market during the period January 1 to May 16 2023.

“This capital flow into the country confirms macroeconomic stability, economic recovery, and high economic growth providing strong confidence in the Indonesian economy,” Sri Mulyani said at a press conference on the KiTa State Budget for May 2023 which was monitored online in Jakarta, Monday.

The State Treasurer detailed that foreign funds that entered the Indonesian financial market consisted of the bond market of Rp. 59.07 trillion and the stock market of Rp. 23.29 trillion.

During April alone, there was an inflow of foreign capital of IDR 4.16 trillion on the domestic bond market and IDR 12.29 trillion on the stock market. Even so, it was recorded that foreign capital flows out of the two financial markets were IDR 1.43 trillion and IDR 2.5 trillion respectively during the period May 1-16.

With the swift inflow of foreign capital entering the bond market, he said foreign ownership in government securities (SBN) slightly increased from 14.36 percent in December 2022 to 15.2 percent on 16 May 2023.

Nevertheless, the largest holdings of SBN are still held by banks, namely 23.1 percent, in line with the incessant national banking activities starting to carry out credit.

According to Sri Mulyani, domestic financial market sentiment still supports performance and maintains stability in the SBN market. Positive sentiment on the domestic financial market was able to maintain yield levels (yield) is not very volatile.

“For the 10-year SBN, our local currency yield decreased to 6.42 percent, causing a difference (spreads“The yield on the 10-year Indonesia Global Bond, which is 4.7 percent, has narrowed,” he explained.

In addition, he continued, the difference in yields on Indonesian SBN and US bonds with a tenor of 10 years also decreased to 274 basis points (bps) as of May 19, 2023. This figure is very low compared to the situation in January 2022 which amounted to 474 bps.

The position of the difference in Indonesia’s yields is slightly different from that of the Philippines, which is 217 bps. Meanwhile, there are several countries that have very large differences in their yields on state bonds, namely Brazil at 818 bps and Mexico at 515 bps.

“These two countries have raised interest rates so high that they have had an impact on their state bond yields,” said Sri Mulyani.

Also read: Increasingly heavy, BI records incoming foreign funds reaching IDR 19.2 trillion
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Also read: Minister of Finance: IDR 24.7 trillion in repatriation funds have not yet entered Indonesia
Also read: The Minister of Finance hopes that more and more companies will enter the stock exchange

Reporter: Agatha Olivia Victoria
Editor: Guido Merung


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