Indonesia Is More Exposed to Capital Flight Than Malaysia, Says S&P
- Deeper domestic capital markets offer Malaysia protection
- Foreign funds own a larger proportion of Indonesian debt
This article is for subscribers only.
Rocked by a political scandal and falling oil prices, Malaysia has been dominating headlines in recent months as the ringgit leads a drop in Asian currencies. That’s taken the spotlight off the economy of neighboring Indonesia, which Standard & Poor’s says is more exposed to capital flight.
“The thing about Malaysia is that the capital market is deeper there, so there’s less reliance on foreign capital among corporates or banks to fund their growth,” said Kyran Curry, S&P’s director of sovereign ratings in Singapore. “Indonesia is much more vulnerable to shifts in outflows and inflows. We’re worried about Indonesia’s foreign-exchange reserves.”