(June 5): Indonesian Finance Minister Purbaya Yudhi Sadewa defended his country’s economic track record amid a slump in the rupiah and stocks, pointing to inflows into the debt market as proof investors remain optimistic.
Government bonds and central bank debt securities “saw inflows in the second quarter through early June”, Purbaya said at a briefing in Jakarta on the country’s budget situation. While equities did see outflows in the second quarter, the net figure remains positive, he added.
“This addresses the doubts held by many people, including those expressed in the media,” he said, referring to a Bloomberg News story about investors selling Indonesian assets. “As we can see, optimism about the Indonesian economy remains strong. So don’t be swayed by a single news report. Inflows into SRBIs and bonds remain significant.”
The benchmark stock index is the worst performer this year among more than 90 global gauges tracked by Bloomberg, and the rupiah this week weakened beyond 18,000 per dollar.
Purbaya’s remarks come less than a day after he was forced to deny speculation he would resign as finance minister less than a year into the job. Talk of Purbaya’s possible departure spread fast on Thursday amid deepening concerns about the economy and a graft probe involving President Prabowo Subianto’s US$15 billion (RM60.46 billion) food programme.
The rupiah was little changed on Friday, while stocks extended declines in the afternoon session to the lowest level since December 2020. The yield on 10-year government bonds held an earlier increase of five basis points to 6.86%.
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