Indonesia's Money Market Flooded by Foreign Fund

In the second quarter of 2009, foreign fund flow to Bank Indonesia Certificate (SBI) and the state commercial paper (SUN) reached 406.02 million U.S. dollars and 748.33 million dollars respectively, the central Bank Indonesia said.

In the second quarter of 2009, foreign fund flow to Bank Indonesia Certificate (SBI) and the state commercial paper (SUN) reached 406.02 million U.S. dollars and 748.33 million dollars respectively, the central Bank Indonesia said.
According to Tuesday's Investor Indonesia Daily, with those jumps, foreign fund position in SBI and SUN stood at 2.03 billion dollars and 8.50 billion dollars, respectively.

Meanwhile, in capital market, foreign fund recorded net buy of 501.63 million dollars in the second quarter.

The huge amount of the foreign fund flow was able to balance between demand and offer of foreign exchange in the domestic market, said the paper.

In the second quarter of 2009, foreign fund flow stood at 3.18 billion dollars while demand from domestic players was only 1.67 billion dollars.

The percentage of the foreign fund was 37 percent in share portfolios, 20.9 percent in SBI and 18.9 percent in the government bonds.

Kostaman Thayib, the Director of PT Bank Mega Tbk, said that positive economic growth in Indonesia attracted foreign investors for a while, apart of effect of decreasing risk perception.