Deutsche Bank Indonesia projects that investors will be lured back to the country's domestic capital market, given the stronger rupiah and supportive interest rates. The local arm of the German investment bank has forecast that the rupiah will strengthen during the first half of the year, in line with potential economic improvements due partly to the nationwide vaccination program. It also expects Bank Indonesia (BI) to maintain the benchmark interest rate at around 3.75 percent this year after making five rate cuts in 2020 to buoy the economy amid the COVID-19 health emergency.
As a result, strategists at Deutsche Bank Indonesia “believe that Indonesia offers one of the better volatility-adjusted carry propositions in emerging markets”, it said in a statement on Jan. 13 “Indonesia remains one of the most attractive destinations for emerging markets investors allocating capital to Asia,” Deutsche Bank chief country officer Siantoro Goeyardi said in the statement. The government has been aggressively issuing bonds to finance its Rp 695.2 trillion (US