Foreign Investors Still Optimistic To Plant Capital In Indonesia

Share illustration (Photo: Doc. Antara)

JAKARTA - Foreign investors are still optimistic about Indonesia, one of which is relatively safer to invest. Especially in the midst of the Central Bank of the United States (US), the Federal Reserve again gave a hawkish signal.

"This optimism is because Indonesia's economic fundamentals are relatively more solid than other countries," said Nafan Senior Investment Information Mirae Asset Nafan Aji Gusta quoting Antara.

He said there were many factors that caused the optimism of foreign investors towards Indonesia, namely macro conditions, the possible level of Indonesia's recession decreased from 5 percent to only 2 percent.

Therefore, thanks to the domestic economy that is still resilient and supported by relatively solid domestic macroeconomic fundamentals, foreign capital will continue to flow.

In Indonesia, the stock market still recorded an entry capital flow of around Rp2.28 trillion since the beginning of this year and managed to support the Composite Stock Price Index (JCI), which had fallen sharply to reach the lower limit some time ago.

The same condition also occurred in the bond market which was flooded with incoming capital, reflecting the relatively stable movement of state securities (SBN) 10 years.

In addition to the shrinking potential for Indonesia's recession, Nafan said the rupiah exchange rate was still strong even though it was at the level of Rp. 15,000.

"Rupiah has not touched higher for longer sentiment, so it is still relatively stable," he also said.

Then, he said again, domestic inflation is also still stable and lower than the benchmark interest rate of Bank Indonesia (BI). BI's policy of maintaining liquidity also provides optimism.

Another factor that provides optimism for foreign investors towards the country's economy is Indonesia's external resilience which is still relatively strong, such as the current account surplus and the trade balance surplus.

The opening of the Chinese economy will also help restore demand, including to Indonesia, so that investors can be more optimistic.