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Jakarta Post

BI injects $1.8b to stabilize Indonesian markets as investors flee over coronavirus fears

  • Riska Rahman

    The Jakarta Post

Jakarta   /   Thu, February 6, 2020   /   05:23 pm
BI injects $1.8b to stabilize Indonesian markets as investors flee over coronavirus fears Two tourists cross Jl. Thamrin in front of the Bank Indonesia building, Jakarta, in this file photo. (JP/Jerry Adiguna)

Bank Indonesia (BI) has injected about Rp 25 trillion (US$1.82 billion) into the country’s financial markets as investors sell off assets over fears that the rapidly spreading coronavirus will hurt the global economy.

BI Governor Perry Warjiyo said on Wednesday that the central bank had been buying government bonds in the market to stabilize prices and liquidity as the coronavirus scared off foreign investors.

“Do you know how many bonds we have bought from the government with the heavy capital inflow this year? The figure is close to Rp 25 trillion,” Perry said during his remarks at the Mandiri Investment Forum in Jakarta.

He said the disturbance the virus was causing was not only happening in the spot market but also in the domestic non-deliverable forwards (DNDF) market.

Foreign investors dumped Indonesian stocks on the Indonesia Stock Exchange (IDX), recording a Rp 2.07 trillion net selloff in the regular market as of Thursday afternoon.

In addition to applying monetary policies, the central bank is cooperating with the government to maintain market stability.

“We are working closely with the Finance Ministry to stabilize the market and prevent the short-term impact of the coronavirus,” he said.

Factories are closing, and some workers have been told to work from home as the coronavirus outbreak impairs Chinese cities. As of Thursday morning, 563 had died from the illness with 28,256 cases having been reported. The virus is believed to have originated in Wuhan. (ydp)