Liquidity And Interest Tribes In Europe And The United States, Foreign Capital In Indonesia Wap Rp126.85 Trillion

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani Indrawati said foreign capital out of Indonesia (capital outflow) reached Rp126.85 trillion until August 26, 2022.

"Indonesia has a capital outflow, especially in the holding of our government bonds, which has decreased to Rp126 trillion," said Minister of Finance Sri Mulyani in a Working Meeting with Commission XI of the DPR RI, quoted by Antara, Wednesday, August 31.

Sri Mulyani explained that such a large capital outflow occurred as a result of tightening liquidity and interest rates in developed countries such as Europe and the United States (US) so that Indonesia and other emerging countries were affected.

However, he said Indonesia was lucky in 2021 and 2022 because the government managed to reduce the expansion of foreign ownership in government bonds, which previously reached 38.5 percent to 15.34 percent.

"On August 26, 2022, our foreign holders at 15.34 percent means that even though there is a capital outflow move which reaches Rp126.85 trillion, the impact on yields is more manageable," he explained.

This is in line with the government together with Bank Indonesia (BI) which continues to maintain the stability of Government Securities (SBN) so that their performance is relatively stable.

Sri Mulyani said that SBN's performance in this volatile period was relatively in a good situation compared to other countries such as the US, whose US Treasury yields jumped more than 100 percent.

In this case, Indonesia year to date (ytd) also experienced an increase from the 10 year bond at 12.4 percent, while the Philippines 28.7 percent and Mexico 17.5 percent.

"This is something we have to protect because it relates to the cost of funds from our financing," said Sri Mulyani.

Meanwhile, before the COVID-19 pandemic, namely in 2019, emerging countries had enjoyed capital inflows of around 70 billion US dollars, while in 2022 there was capital outflow of up to minus 50 billion US dollars.

"This is the reverse of the existence of hard currency, especially the dollar which is very decisive for many countries," said Minister of Finance Sri Mulyani.