Jakarta, CNBC Indonesia – The default of Chinese property giant, Evergrande, is considered to have an impact on the financial market in Indonesia. This is because the property market in China has a very large portion of China’s gross domestic product (GDP), which reaches 25%.
President Director of PT Schroders Investment Management Indonesia (Schroders), Michael Tjandra Tjoa said that although it will have an impact on Indonesia, the effect will be minimal on the domestic market, so investors are considered not to worry about this.
“Yes [berdampak], not too big for Indonesia, but give effect. Because property influence property in the China market is 25% of its total GDP, of course it has an effect on Indonesia. But we don’t have to worry too much that this Evergrande will be bailed out [ditalangi] by the government, it will be handed over to other countries or other conglomerates there,” said Michael at the Indonesia Knowledge Forum (IKF) X – 2021, Thursday (7/10/2021).
For this reason, the default incident that was followed by other Chinese property companies, including Fantasia Holdings, is considered not to be an obstacle for investors to continue investing in the domestic financial market.
This is because, in addition to shocks in global financial markets such as Evergrande and the fear of tapering (reduction in bond purchases) by the US central bank, The Fed, the Indonesian financial market is currently considered to be better than before.
Especially now that the Indonesian economy has started to stretch again after experiencing a deep decline last year due to the pandemic. This shows that many companies are starting to rise.
“Indonesia is in much better positioning now compared to some time ago when the tapering took place,” he added.
He explained that the current position of foreign exchange reserves as of September is worth US$ 146 billion, this is the highest number, coupled with the trade balance which is in a better position than before the Covid-19 pandemic.
“Also we see that the interest rate [suku bunga[ kita juga masih memberikan prospek dibandingkan negara-negara lain,” terangnya.
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