REPUBLIKA.CO.ID,JAKARTA - Bank Indonesia (BI) considers that foreign direct investment (FDI) slowdown is still reasonable. The Indonesia's FDI recorded at 6.9 billion USD in the first quarter of 2014 or decreased 500 million USD.
According to Governor of BI, Agus Martowardojo, the decrease is at normal level, since investment is not always in yearly term.
"When a company plans to built new factory, possibly the company's expansion will take place in three to five years," Martowardojo said.
Yet, he said the capital inflow in portfolio was quite high which in turn could compensate the US dollar's supply.
"In regard to the supply of US dollar, the capital inflow to Indonesia is relatively either more stable or lower, but I consider the situation is still reasonable,"
Earlier the investment board (BKPM) said that FDI commitments for the January-March period totaled 72 trillion IDR, equivalent to 6.9 billion USD and up 9.8 percent from a year ago. The slowdown in FDI growth comes in the wake of a government ban in January of mineral ore exports which raised concerns among investors over the policies. The government has targetted foreign investment of 32.8 billion USD this year up from just over 23 billion USD in 2013.
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