Indonesia Passes Tax Amnesty

Sovereign bonds in Southeast Asia’s largest economy just received an extra boost as Indonesian law-makers passed a tax amnesty forecast to invite 560 trillion rupiah ($42 million) back into the Indonesian economy.

Indonesia is strongly driven by domestic consumption and this has proven to be the way to go (even China is trying to reshape its economy to be one of domestic consumption).

“With the anticipation for all those inflows the rupiah will remain supported so that allows investors to invest in Indonesia’s bonds comfortably,” said Ezra Nazula, who helps manage $4 billion as head of fixed income at PT Manulife Aset Manajemen Indonesia in Jakarta.

There is also a possibility that S&P which gave Indonesia a junk rating in June may upgrade her status in October or November.


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