Foreign Ownership In SBN Drops To Level 15 Percent

Illustration (Photo: Doc. Antara)

JAKARTA - Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS) Purbaya Yudhi Sadewa revealed that the remaining 15 percent of foreign ownership in State Securities (SBN).

Purbaya explained, there are two sides that can be seen from this development.

"The good side of this is that our dependence on foreign funds for development is getting smaller, more money comes from domestic sources that can be used to finance, for example, national infrastructure development," he said in an official statement, Wednesday, August 10.

Meanwhile, another advantage is that the stability of the SBN market is easier to maintain because Indonesia is no longer affected by the movement of foreign investors in the bond market.

With a smaller number of foreign ownership, it will be relatively easier for the Central Bank and the government to control volatility in the bond market, so that financial market stability is relatively easier to maintain.

He also compared it with Japan, where almost 90 percent of its securities are controlled by domestic investors.

"So if there is a turmoil in the world market, the yield of the Japanese government remains stable, and the stability of their financial system is maintained," he said.

Then regarding the risk if foreign ownership is getting smaller, he explained, if a lot of foreign capital comes out, of course this will also disrupt rupiah stability, and the rupiah will be corrected.

“But they are also investors who are looking for returns. If a country's economic growth is strong, it will also attract investment in the sovereign debt market as well. Strong economic growth will invite investment in the real sector as well as in the financial sector, so that the exchange rate strengthens and the yield of government bonds tends to fall," said Purbaya.

"This will benefit investors in the government bond market. So, the key is that we must continue to maintain the growth and sustainability of our economic growth," he concluded.