KORANPAGARALAMPOS.COM - Indonesia experienced a significant capital outflow during the first quarter of 2026 as global economic tensions intensified due to the ongoing conflict in the Middle East.
Perry Warjiyo, Governor of Bank Indonesia, revealed that foreign capital leaving Indonesia reached US$800 million, equivalent to around Rp14.12 trillion.
The announcement was made during a press conference following the latest Board of Governors Meeting held on May 20, 2026.
According to Perry, worsening global economic conditions have triggered a shift in investor behavior, with many moving their funds into safer investment assets such as United States government bonds, commonly known as US Treasuries.
Global investors are increasingly seeking stability amid geopolitical uncertainty and rising financial risks.
One of the key reasons behind the capital flight is the growing attractiveness of US Treasury yields.
The 10-year US Treasury yield climbed to 4.66 percent, while the 2-year yield reached 4.11 percent as of May 19, 2026.
These higher returns have encouraged investors to pull money out of emerging markets, including Indonesia.
Perry explained that the rise in US Treasury yields was driven by expanding fiscal deficits in the United States and expectations that high interest rates would remain in place for a longer period.
This situation has created intense pressure on developing economies that rely heavily on foreign investment flows to maintain market stability.
In addition to financial concerns, geopolitical tensions in the Middle East have also contributed to global market instability.
The conflict reportedly disrupted energy distribution routes, particularly around the Strait of Hormuz, one of the world’s most strategic oil shipping lanes.
Concerns over supply disruptions pushed global oil prices higher, increasing uncertainty across international markets.
Despite the capital outflow in the first quarter, Bank Indonesia remains optimistic about the country’s economic resilience.
Perry stated that several policy measures implemented by the central bank have started to restore investor confidence during the second quarter of 2026.