Foreign Capital Surge: Rp. 4.14T Flows Into Indonesia Mid-May

In just one week, Indonesia attracted over Rp. 4 trillion in foreign funds amid growing investor confidence.

Indonesia’s financial markets recorded a sharp influx of foreign capital during the second week of May 2025, signaling strong investor confidence and economic resilience. The funds primarily entered through government securities and equities.

Strong Inflow Signals Investor Optimism

Bank Indonesia (BI) reported that foreign capital inflow reached Rp. 4.14 trillion (approximately SGD 331.2 million) between May 6–9, 2025. This surge reflects sustained investor appetite for Indonesian assets, particularly amidst stable domestic economic indicators.

Where The Money Went

According to BI’s official statement, the inflows were channeled into:

Government Securities (SBN): Rp. 2.62 trillion

Stock Market: Rp. 1.52 trillion

The data, compiled from the banking sector and capital market channels, underscores foreign confidence in Indonesia’s fiscal and monetary policies.

Year-To-Date Performance Still Negative

Despite the encouraging weekly data, net foreign capital flow remains negative in 2025. From January to May 9, Indonesia recorded a total outflow of Rp. 29.32 trillion (SGD 2.35 billion). This reversal highlights lingering caution among global investors following early-year volatility.

Risk Premium Remains Stable

Indonesia’s 5-year Credit Default Swap (CDS) premium, a key risk indicator for sovereign bonds, stood at 67.69 basis points as of May 9. The figure reflects relatively low perceived risk among foreign investors, reinforcing trust in Indonesia’s macroeconomic stability.

Rupiah Still Under Pressure

Even with rising inflows, the Indonesian Rupiah remains under pressure due to broader external factors such as a strong US dollar and cautious global sentiment. Bank Indonesia continues to monitor currency stability and deploy interventions as necessary.

Forward Outlook: Steady Eyes On Policy

Economists are watching how government reforms and Bank Indonesia’s policy stance will influence future capital flows. With elections over and political stability affirmed, Indonesia could see stronger, more consistent inflows—especially if global interest rates ease in the coming months.

The Rp. 4.14 trillion inflow during May’s second week provides a much-needed vote of confidence in Indonesia’s markets. While 2025 has seen net outflows overall, this rebound hints at a possible trend reversal. For Indonesian and Singaporean businesses and investors, such capital movements reflect underlying economic strength and could shape regional investment strategies in the near term.

Sources: Liputan6 (2025), Kontan (2025)

Keywords: Foreign Capital, Capital Inflow Indonesia, Bank Indonesia, Government Bonds, Equity Market