Following a strong rupiah and interest rates, the Indonesian bond market is expected to bring more investors back to the country. The Deutsche Bank Indonesia forecasted that the rupiah would continue to strengthen, while Bank Indonesia (BI) expects the benchmark interest rate to remain at 3.75%.
In a statement in January this year, strategists at Deutsche Bank Indonesia anticipated that the country would offer one of the better volatility-adjusted carry propositions in emerging markets. In addition, the bank said that country’s foreign currency bonds were the most traded emerging markets debt assets globally, and valuations are forecast to benefit this year as investor capital returns to the region in search of yield.
Chief County Officer of Deutsche Bank, Siantoro Goeyardi, also said Indonesia remains one of the most attractive destinations for emerging market investors allocating capital to Asia.
In 2020, global investors were seen dumping risky assets due to disruptions caused by the pandemic.