JAKARTA, INDONESIA / RankWire.AI / – Through early October 2026, Indonesia’s financial markets attracted foreign investments totaling Rp131.1 trillion, approximately $7.33 billion, as announced by Finance Minister Suahasil Nazara during the government’s monthly state budget briefing in Jakarta. The Finance Ministry indicated that the majority of these inflows were driven by government securities and Bank Indonesia instruments. Despite ongoing sell-offs in the domestic equity market, recent data showed persistent positive foreign demand for rupiah-denominated assets.
Foreign holdings of government securities, locally known as SBN, amounted to Rp36.7 trillion, roughly $2.05 billion, from the start of the year. In just the first six days of October, foreign investors increased their holdings of government bonds by nearly Rp8 trillion. Additionally, Bank Indonesia Rupiah Securities, or SRBI, attracted considerable nonresident investments throughout 2026, with official data indicating nonresident SRBI net settlement inflows reaching Rp176.50 trillion from January 2 to October 8.
The pattern of capital flows experienced a notable shift during the year, with foreign investment shrinking early on but then surging to Rp140.6 trillion in the second quarter. Although the third quarter saw a slowdown, the fourth quarter began with renewed net buying, and by October 7, net foreign inflows for the period had hit Rp22.01 trillion, approximately $1.23 billion. These fluctuations underscore the uneven pace of foreign investment across Indonesia’s financial markets in 2026.
Inflows Primarily Driven by Government Bonds and Central Bank Securities
In contrast, the equity market experienced net foreign outflows totaling Rp84.2 trillion, around $4.70 billion, so far this year. The inflows into bonds and central bank securities, however, more than compensated for the equity sales in the overall market flow calculations. The Finance Ministry highlighted that fixed-income instruments enjoyed the strongest foreign interest during this period, emphasizing ongoing enthusiasm for rupiah-denominated assets as part of its October fiscal report.
Indonesia’s sovereign bond market also demonstrated tighter spreads compared to similar U.S. debt, with the yield gap between 10-year rupiah government bonds and 10-year U.S. Treasuries narrowing to 188 basis points. The Ministry contrasted this with the spreads that could have been as wide as about 1,000 basis points two decades ago. This comparison was made in conjunction with the latest capital flow data and the government’s assessment of current conditions in the domestic bond market.
Foreign Reserves Stay Near $146 Billion
Bank Indonesia reported official reserve assets of $146.3 billion at the end of September, a slight decrease from $146.5 billion in August. The September reserve covered 5.3 months of imports, according to the central bank, and also sufficed for 5.2 months of combined imports and government external debt servicing. Bank Indonesia stated that the reserve level remained above the international adequacy standard of roughly three months of imports, with government foreign borrowing and tax and service receipts also influencing the September reserve figure.
The central bank noted that foreign capital inflows continued to bolster Indonesia’s external resilience alongside its reserve position. At its September meeting, Bank Indonesia maintained its policy rate at 5.75%, and by September 21, it reported $0.4 billion in third-quarter portfolio inflows, which included government global bond issuance and domestic government securities purchases. These latest figures place the Rp131.1 trillion inflow so far in 2026 within a broader trend of shifting toward fixed-income assets, even as foreign investors continue to sell equities.