Foreign Capital Inflows Positive Sentiment For Rupiah: BI

Jakarta (Antara Bali) - Governor of Bank Indonesia Agus Martowardojo said continued inflows of foreign capital into Indonesia could bring about positive sentiment for the country's currency rupiah.

"Until July 15 this year, Rp110 trillion worth of foreign capital already flowed into the country as against only Rp55 trillion in the whole of last year. This is good for rupiah," Agus said after a working meeting with the Commission XI here on Monday night.

Agus attributed the stronger inflows of foreign capital to an increase in capital market instruments, bonds, and state securities (SBN).

He said he was confident that stronger inflows of foreign capital  would still be recorded with the validation of the Tax Amnesty law.

Last month, the House of Representatives approved and passed into law a tax amnesty bill expected to trigger repatriation funds parked by many rich Indonesian abroad to evade tax.

The central bank predicted that until end of the year, rupiah would be stable at the level of 13,000 per U.S. dollar on the average.

"Year to date until July 15  rupiah value averaged 13,400 per dollar. Currently the rupiah traded at 13,090 - 13,095 per dollar.

In 2017, the central bank predicted that the rupiah value averages 13,300-13,600 per dollar AS.

The tax amnesty policy is expected to help draw more foreign  capital into the country.

"The Tax Amnesty program , which would result in repatriation of fund into the country , would increase the country's foreign exchange reserve," Agus said.

According to studies by the central bank, with the tax amnesty, the country's economy would grow 5.3-5.7 percent in 2017.

"Our base line, state revenues  in redemption are around Rp55 trillion and repatriation around Rp500 trillion," Agus said. (WDY)