The rise of the flow of foreign funds (capital inflow) entering Indonesia raises vulnerability in the handling of capital flows. Ironically, Indonesia does not have a strategy to handle the flow of capital. In fact, it's dangerous when a sudden abrupt capital outflow in large numbers.
"Indonesia should not be lulled by capital inflows because it has not had a way to set capital outflow. Do not forget, all foreign owned Government Securities. If Rp20 trillion just come out, I guarantee that the rupiah would shake, "said Chief Economist of Bank Mandiri, Mirza Adityaswara in Jakarta, Tuesday, September 28, 2010.
Similar disclosed economist IPB, Faith Sugema. According to him, short-term capital inflow to the feared nothing but for the medium and long term can be dangerous. Faith beranalisis based on the experience of high capital inflow may trigger monetary crisis occurred in 1997-1998.
He warned Indonesia's foreign exchange reserves are high at this time not from a trade surplus so it does not have good fundamentals. Ironically, Indonesia is too imposing bond debt from the market so that the interest rate set by the market. The bigger the government issued bonds the greater the refinancing for the next year. Indonesia Today
Similar disclosed economist IPB, Faith Sugema. According to him, short-term capital inflow to the feared nothing but for the medium and long term can be dangerous. Faith beranalisis based on the experience of high capital inflow may trigger monetary crisis occurred in 1997-1998.
He warned Indonesia's foreign exchange reserves are high at this time not from a trade surplus so it does not have good fundamentals. Ironically, Indonesia is too imposing bond debt from the market so that the interest rate set by the market. The bigger the government issued bonds the greater the refinancing for the next year. Indonesia Today
