Jakarta (ANTARA) - Indonesia's planned International Financial Center aims to attract long-term foreign investment and reduce the risk of sudden capital outflows, according to the Finance Ministry.

The center is designed to encourage foreign direct investment to remain in Indonesia longer rather than flow in and out quickly, Financial Sector Stability and Development Director General Herman Saheruddin said Monday.

Foreign investment typically enters Indonesia through capital markets, allowing funds to flow in easily but also making the country vulnerable to sudden outflows, he said.

The government is establishing the center as a specialized hub to encourage foreign investors to commit capital for the long term.

"The aim is to encourage them to establish their companies here," Saheruddin said.

The House of Representatives' Commission XI, which oversees monetary and financial affairs, has agreed with the government to advance the bill establishing the center to its final stage.

The bill is scheduled for passage during a parliamentary plenary session on Tuesday, July 21.

The agreement followed a series of working committee meetings with stakeholders that began in early July.

Finance Minister Purbaya Yudhi Sadewa said Indonesia needs a deeper, more innovative, efficient and internationally integrated financial sector to navigate increasingly complex global economic conditions.

The center is intended not only to consolidate financial sector activities but also to strengthen financing for the real economy, Purbaya said.

Ultimately, it is expected to drive productive investment, create jobs and support national economic growth, he added.