Jakarta (Indonesia Window) – The flow of foreign capital entering the stock market in Indonesia during October 2021 was recorded at 9.9 trillion rupiahs (some 698.5 million U.S. dollars), said Minister of Finance Sri Mulyani Indrawati.

The foreign capital inflows in September 2021 amounted to 4.3 trillion rupiahs (about 303.3 million dollars), then increased in October 2021, said the minister in an online press conference on the state budget here on Monday (Oct. 25).

However, she continued, there was an outflow in the government securities market worth 18.7 trillion rupiahs (some 1.3 billion dollars) in September 2021, which then decreased to 2.6 trillion rupiahs (some 183.4 million dollars) in October 2021.

That was due to global pressures with rising yields on U.S. bonds and the possibility of a reduction in asset purchases (tapering) by the U.S. Central Bank, the Fed.

Sri Mulyani noted that the 10-year tenor of U.S. bond yields has climbed since the beginning of 2021 from 1.06 percent to 1.6 percent or in less than two months.

Meanwhile, the yields on Indonesian government securities with a tenor of 10 years also increased in September 2021 by 31 basis points (bps), as well as those of other emerging market countries such as the yields of Brazilian bonds which rose by 61 bps, those of South Africa which rose by 49 bps, and those of Colombia which rose by 45. bps.

Despite the high global pressure, she believed that the performance of Indonesia's 10-year government securities, especially with the dominance of the rupiah and foreign exchange, is still maintained.

This is supported by the decline in the supply of government securities to the primary market and the issuance of government securities under the third Joint Decree III scheme at the end of this year.

Reporting by Indonesia Window