Indonesia Sees More Capital Inflows After April Rate Hike, C.Bank Governor Says

MACROECONOMICS - JAKARTA. Indonesian central bank governor Perry Warjiyo said on Wednesday more capital inflows had been seen since Bank Indonesia hiked interest rates last month in an effort to stabilise the rupiah, and he expected the trend would continue.

"Our decision to hike interest rate and also higher rates for rupiah securities have increased the market and investor confidence, therefore attracting more capital inflows into Indonesia," Warjiyo said.

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He said total capital inflows into Indonesia had reached more than 20 trillion rupiah ($1.25 billion) so far in May.

The governor also said BI will continue working to strengthen the currency beyond 16,000 a dollar.

The rupiah last month fell to 16,285 per U.S. dollar, its lowest since the COVID-19 pandemic, as rising tensions in the Middle East and delayed expectations of U.S. rate cuts prompted capital outflows from emerging economies.