Indonesia should receive more capital

Economist A. Prasetyantoko says foreign capital inflows to Indonesia will increase after Moody’s ratings agency downgraded Japan's debt rating on Wednesday.

Moody's cut Japan's government bond rating to Aa3 from Aa2. The new rating is three notches below Moody's top Aaa rating. It also said the outlook for the rating is stable.

Following the downgrade, the Jakarta Composite Index slipped 33.44 points to 3,847 on Wednesday.

“The fall is only temporary. It’s almost like when the US debt rating was downgraded several weeks ago, but after that the foreign capital will return to Indonesia,” Prasetyantoko said Wednesday as quoted by kompas.com.

“Investors will recalculate their portfolios. As the condition of stock exchanges around the world is currently not favorable, particularly in the developed countries, their capital will return to countries with good economic growth, such as Indonesia."