Jakarta (Indonesia Window) – The net outflow of foreign capital from Indonesia’s domestic financial market as of March 31, 2022, reached 1.3 billion U.S. dollars as a result of the conflict between Russia and Ukraine, Finance Minister Sri Mulyani Indrawati has said.

Foreign capital outflows in Indonesia’s domestic financial market are under pressure with portfolio investment experiencing a net outflow of 1.3 billion U.S. dollars as of March 31, 2022, she said at a press conference here on Wednesday (Apr. 13).

Sri Mulyani explained that the escalation of the war between Ukraine and Russia has added to the volatility of global financial markets which has an impact on domestic financial markets, including a net outflow of 1.3 billion U.S. dollars.

However, according to her, compared to other emerging markets that also experienced net outflows, the pressure experienced by Indonesia is still relatively lower and better.

Meanwhile, Indonesia's foreign exchange reserves in March 2022 remained at a high level, reaching 139.1 billion U.S. dollars.

This amount is equivalent to financing 7.2 months of imports or 7.0 months of imports and financing the government's foreign debt.

This figure is also above the international adequacy standard which is usually calculated at around three months of import needs.

In addition, the rupiah exchange rate was maintained amidst global financial market uncertainty, although it depreciated 0.33 percent in the first quarter of 2022.

On the other hand, the 0.33 percent depreciation against the rupiah was lower than the currencies of a number of other developing countries.

The Malaysian ringgit depreciated at 1.15 percent (ytd), the Indian rupee 1.73 percent (ytd), and the Thai baht at 3.15 percent (ytd).

Reporting by Indonesia Window