- AP Photo/Ahn Young-joon
VIVAnews - The capital outflow in Indonesia during November 2010 reached Rp 13.7 trillion due to negative sentiments among investors from the current economic crisis in Ireland, the interest rate increase in China, and Korea's heating political tensions.
According to a spokesperson from Bank Indonesia, Difi A Johansyah, the capital outflow is also set off by some adjustments in portfolios prior to the end of the year carried out by foreign investors.
"Foreign investors show less interest in all domestic financial assets," he told VIVAnews today, Dec 1.
The highest decrease is recorded by the Bank Indonesia Certificate (SBI), hitting Rp 11.18 trillion. According to Difi, in addition to global sentiments, the fall is caused by lack of SBI supply in the secondary market. The foreign ownership portion in state bonds drops by 29.2 percent, compared to the previous 29.5 percent. Meanwhile, the SBI ownership decreases by 28.2 percent compared to the previous 30 percent.
The final level of SBI in late November reached Rp 61.46 trillion while State Bonds dropped by Rp 57 billion.
The minor interest of foreign investors over SBI in the secondary market caused the certificate's daily transaction to be cut down.
Danareksa Institute Chief Economist, Purbaya Yudhi Sadewa, said the decrease is concerned with foreign investors's attempts in seeking countries whose risks of being affected by European debt crisis are small.
He claimed that if the largest contraction of foreign fund hits the SBI, it would be a good signal because the instrument is actually made use of by the central bank to absorb domestic liquidity. "We're always worried if hot money keeps coming in. If the fund is out of SBI, it'd be good," he said.
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Translated by: Bonardo Maulana W
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