Adrian Wail Akhlas, Jakarta – The novel coronavirus outbreak has pushed investors to leave the country's financial markets, resulting in a foreign outflow of about Rp 11 trillion (US$805.9 million) last week, which has put pressure on the rupiah, a central banker has said.
Despite the hefty outflow, Bank Indonesia (BI) has recorded an inflow of Rp 400 billion so far this year.
"The outbreak has adversely affected financial markets worldwide as it is also pressuring the rupiah, although the currency appreciated on Thursday," BI deputy governor Dody Budi Waluyo told reporters in Jakarta.
The rupiah had weakened 0.3 percent against the US dollar to Rp 13,675 as of Friday afternoon. The currency has appreciated about 1.6 percent against the greenback so far this year, Bloomberg data shows.
As of Friday afternoon, the 2019-nCoV virus had infected more than 31,400 people across the globe and had killed 638. The spread of the pneumonia-like illness has forced businesses in China to stop or limit their operations amid lockdowns in dozens of provinces.
The cooling business activity in the world's second-largest economy has spurred investors to seek safer assets and leave emerging markets, such as Indonesia.
The local stock market has still managed to record a net foreign buy of about Rp 176 billion as of Friday despite the Jakarta Composite Index falling 4.76 percent so far this year.
Dody added that the central bank's policy path would depend on the latest developments, adding that BI would intervene if the virus disrupted the country's economy.
BI has injected about Rp 25 trillion into the country's financial markets amid a sell-off over fears that the rapidly spreading novel coronavirus would 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.