JAKARTA, June 12 : Indonesia's central bank spokesperson said on Friday that foreign investors have responded positively to its rare off-cycle interest rate hike and an increase in bond yields, as reflected by a rise in foreign capital inflows this week.Bank Indonesia (BI) raised interest rate by 25 basis points to 5.50 per cent on Tuesday, aiming to stabilise the rupiah after it hit a series of record lows. BI recorded a higher foreign capital inflow in an auction of up to one-year tenor Bank Indonesia bonds, known as SRBI, on June 10, spokesperson Ramdan Denny Prakoso said. It raised 15 trillion rupiah ($834.49 million) from the auction, according to BI's website.
"Foreign capital inflows have also begun to return to the government bond market, particularly in the short and medium-term tenors," Denny said. The central bank will continue to monitor developments in global and domestic financial markets while maintaining the attractiveness of domestic financial instruments to support foreign capital inflows, he added. BI will also continue to take action to stabilise the rupiah through "consistent and measured NDF intervention in the offshore, onshore and spot markets," the spokesperson said. The rupiah strengthened by 0.25 per cent to 17,930 a dollar in the opening session on Friday.($1 = 17,975 rupiah)
