Rich Indonesians wary of Prabowo’s policies, economic stability, send wealth overseas
The shift began in October when Prabowo came to power but accelerated substantially after the rupiah plunged in March, people have said
Wealthy Indonesians are shifting hundreds of millions of dollars offshore amid mounting concerns over President Prabowo Subianto’s fiscal discipline and the country’s economic stability.
Gold and real estate are two popular havens although a third, less traditional, pocket has emerged: cryptocurrencies – in particular Tether Holdings SA’s stablecoin USDT, which is designed to maintain a 1:1 peg to the US dollar. The assets all offer ways for the country’s rich to skirt scrutiny in moving large sums of money around.
Bloomberg News spoke to more than a dozen wealth managers, private bankers, advisers and high-net-worth individuals for this story, all of whom asked not to be identified discussing confidential information.
One private banker said that several Indonesian clients with a net worth of between US$100 million and US$400 million had converted up to 10 per cent of their assets into crypto. The shift began in October when Prabowo came to power but accelerated substantially after the rupiah plunged in March, the person said.
The outflows from Southeast Asia’s biggest economy may have contributed to the steep decline in Indonesia’s currency. The rupiah on Wednesday fell to its lowest in history against the dollar before rebounding slightly on Thursday as investors priced in the impact of rising trade frictions from US President Donald Trump’s on-again, off-again tariffs.