Indef: Investors Will Shift to Safe Assets Amid Tariff Uncertainty
Jakarta (ANTARA) - The Head of the Macroeconomics and Finance Centre at the Institute for Development of Economics and Finance (Indef), M Rizal Taufikurahman, has said that global investors will tend to shift towards safe-haven assets when they perceive United States tariffs as a source of policy volatility.
According to him, investors view US tariff policy not merely as protectionism but as a source of policy uncertainty. When trade rules can change at short notice, corporate profit projections, commodity prices and logistics flows become difficult to predict.
“As a result, global investors tend to temporarily move funds into safe assets such as US government bonds and the US dollar, whilst emerging market assets are considered riskier even though their domestic fundamentals remain unchanged,” Rizal said when contacted by Antara in Jakarta on Sunday.
Rizal explained that US tariff turbulence primarily works through the channel of global risk sentiment rather than directly through goods trade.
“Rapid policy changes increase global trade uncertainty, leading global investors to reduce their exposure to developing-country assets in a risk-off move,” Rizal said.
For Indonesia, he said the impact typically takes the form of short-term portfolio outflows from bonds and equities, rising yields on Government Securities (SBN), and pressure on market liquidity.
“So the initial effect is felt more acutely in financial markets than in the real sector,” Rizal said.
Rizal continued that the most immediate pressure usually falls on the rupiah, given its sensitivity to global dollar movements and capital flows.
He noted that a strengthening US dollar and capital outflows could cause the rupiah to weaken temporarily, whilst the Jakarta Composite Index (IHSG) tends to move with greater volatility, with the commodities sector holding up relatively better than manufacturing and banking.
“However, this remains sentiment-driven, so market direction will depend heavily on global stability over the coming days rather than purely on domestic factors,” Rizal said.
For the coming week, Rizal revealed that investors will be watching three key matters: the direction of the Federal Reserve’s interest rate policy and US inflation data; Bank Indonesia’s policy response regarding rupiah stability and liquidity; and the certainty and clarity of US tariff implementation towards trading partners, including Indonesia.
“In addition, domestic data such as inflation, foreign exchange reserves, and foreign capital flow developments will also serve as indicators of whether external pressure is merely temporary or is beginning to affect national macroeconomic stability,” Rizal said.