Draghi, Not Yellen, Becomes the Biggest Swing Factor for Jakarta
- Indonesia on track to notch up a record amount of inflows
- Europe holds twice as many Indonesian bonds as U.S. investors
Cars and motorcycles sit in congested traffic while driving past commercial buildings in the business district in Jakarta, Indonesia, on Wednesday, June 18, 2014. The parliament budget commission approved a revised 2014 budget deficit of 2.4 percent of gross domestic product, Chairman Ahmadi Noor Supit said in Jakarta on June 18.
Photographer: Dimas Ardian/BloombergWhen European Central Bank President Mario Draghi gives his policy update later Thursday, his words will reverberate halfway across the world in the tropical climes of Indonesia.
Where once the Federal Reserve’s policy outlook was the biggest swing factor for policy makers in Jakarta, an influx of yield hungry European investors is changing all that. They now account for the biggest share of foreign money invested in Indonesian bonds and have helped drive inflows of $9.2 billion this year -- putting them on course for a record.