Indonesians Flee Domestic Markets for Overseas Assets as Figures Staggering
Jakarta, CNBC Indonesia – Domestic financial markets have been under pressure throughout the year. The rupiah continues to face pressure against the US dollar, while the Jakarta Composite Index (JCI) has declined significantly. Government bond yields have also surged, indicating bond prices are under strain as investors demand higher returns. This pressure across three instruments signals market participants are growing cautious towards domestic financial assets.
Conversely, a notable detail from the latest Indonesia Balance of Payments (BOP) report released by Bank Indonesia (BI) on Friday (22 May 2026) is a significant deficit in the ‘other investments’ category for Q1 2026.
Other investments are rarely discussed, yet the figures are crucial as they reveal capital movements beyond direct and portfolio investments.
Other Investments Deficit Largest in Five Years
BI recorded a $7.8 billion deficit, equivalent to Rp138.29 trillion (assuming an exchange rate of Rp17,730/$1), in the ‘other investments’ category for Q1 2026. This is a substantial figure, marking the deepest deficit since Q2 2021 — nearly five years ago — when the category recorded a $7.87 billion shortfall.
Simply put, ‘other investments’ is a component of financial transactions recording capital flows outside direct investment, portfolio investment, and derivatives. It includes deposits, loans, trade credits, advance payments, and other financial assets and liabilities between Indonesia and foreign entities.
While direct investment relates to factory construction or long-term capital deployment, and portfolio investment involves equities and bonds, ‘other investments’ primarily reflects capital flows through deposits, loans, and other financial transactions.
Thus, a large deficit in ‘other investments’ indicates significant outflows, with more funds moving abroad than entering Indonesia via this channel.
This makes Q1 2026 data noteworthy: amid a weakening rupiah and pressured stock index, domestic capital is also flowing significantly overseas via ‘other investments’.
Yet, financial transactions are still supported by other categories: direct investment remains in surplus at $2.02 billion, and portfolio investment at $730 million. However, these surpluses are insufficient to offset the large deficit in ‘other investments’, leaving overall financial transactions in deficit.
Assets Drive Outflow, Indonesian Funds Flowing Abroad
Delving deeper, the main pressure on ‘other investments’ comes from the asset side. In Q1 2026, assets in this category recorded a $6.75 billion deficit, equivalent to Rp119.67 trillion — the deepest since Q3 2024 when asset deficits reached $7.96 billion.
The large asset deficit indicates Indonesians are increasing their overseas asset holdings. This suggests economic actors are seeking safer, more liquid instruments or more attractive opportunities abroad, particularly amid domestic market pressures.
This reinforces the narrative of Indonesian economic actors preferring to park assets overseas. The phenomenon occurs as domestic financial markets face pressure: the rupiah weakens against the US dollar, the JCI declines sharply, and government bond yields surge. Under such conditions, economic actors tend to be more cautious.
Some opt to hold liquidity, while others seek safer assets abroad.
Pressure is also evident on the liability side. In Q1 2026, liabilities in ‘other investments’ recorded a $1.05 billion deficit.
In the balance of payments, liabilities represent foreign funding to Indonesia, such as foreign loans, deposits, or other financial obligations. A deficit here means insufficient inflows or repayments to foreign entities.
Combined deficits on assets and liabilities have severely pressured ‘other investments’. Assets recorded a $6.75 billion deficit, while liabilities fell by $1.05 billion, resulting in an overall $7.8 billion deficit for the category in Q1 2026.
This data shows Indonesia’s financial market pressures stem not only from foreign investors exiting equities and bonds. Another critical factor is the rising overseas asset holdings by Indonesian residents.
Reasons Behind Indonesians’ Growing Interest in Overseas Assets
Several factors drive domestic economic actors to increasingly place assets abroad, especially amid domestic market pressures. 1. Foreign Assets Perceived as Lower Risk
As domestic financial markets weaken, some economic actors seek safer havens for their assets. Foreign assets, particularly in financially stable countries like Singapore and Malaysia, are seen as lower-risk. Both nations are geographically close and have long been regional destinations for capital and investment.
The strengthening of the Singapore dollar and Malaysian ringgit against the rupiah further enhances their appeal. When neighbouring currencies stabilise or appreciate versus the rupiah, assets denominated in those currencies become more attractive to domestic economic actors.
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