JAKARTA, INDONESIA / RankWire.AI / – The Indonesian government announced that Rp131.1 trillion, approximately $7.33 billion, has been invested by foreign investors through early October 2026. Finance Minister Suahasil Nazara disclosed this figure during the latest state budget briefing held in Jakarta. The majority of foreign capital has been directed into government bonds and securities issued by the central bank. The Ministry of Finance emphasized that the overall inflow remains positive for the year, despite overseas investors reducing their holdings in Indonesian equities.
Foreign investors allocated Rp36.7 trillion, roughly $2.05 billion, into government securities known as SBN during 2026. During the first six days of October alone, foreign buyers added nearly Rp8 trillion to government bonds. Additionally, Bank Indonesia’s Rupiah Securities, or SRBI, attracted strong interest from nonresident investors. According to central bank data, net foreign settlement inflows into SRBI reached Rp176.50 trillion from January 2 to October 8.
The pattern of capital movement changed notably across the first three quarters of 2026. After weaker foreign flows at the start of the year, inflows surged to Rp140.6 trillion in the second quarter. Investment activity then slowed down in the third quarter, but renewed momentum in the early part of the fourth quarter saw net foreign investment reach Rp22.01 trillion, or about $1.23 billion, by October 7, as per the latest fiscal update figures.
Most foreign investment directed into fixed-income assets
During the same period, Indonesia’s stock market experienced a contrasting trend. Foreign investors withdrew a net Rp84.2 trillion, equivalent to approximately $4.70 billion, from domestic equities this year. However, strong inflows into bonds and central bank instruments offset these withdrawals, maintaining positive overall foreign capital flows. The Finance Ministry highlighted fixed-income assets as the primary destination for foreign funds, with government securities and SRBI playing critical roles in sustaining the positive total.
Conditions in Indonesia’s sovereign bond market also showed a decreased yield gap relative to U.S. government debt. The spread between 10-year rupiah bonds and comparable U.S. Treasuries narrowed to 188 basis points. Indonesian officials compared this to spreads of around 1,000 basis points approximately two decades ago. These figures accompany the latest assessment of domestic debt markets by the government and underscore the ongoing foreign demand for Indonesian government securities in 2026.
Indonesia’s foreign reserves stay above $146 billion
Bank Indonesia reported official foreign exchange reserves of $146.3 billion at the end of September. This compares with $146.5 billion recorded one month earlier. The September figure covers 5.3 months of imports and remains above the international adequacy standard of about three months. It also suffices for 5.2 months of combined imports and external debt payments. Movements in the reserve position were supported by foreign government borrowing, tax revenues, and service income.
Bank Indonesia continues to monitor foreign portfolio flows as part of its assessment of external financial conditions. The central bank maintained its benchmark policy rate at 5.75% during its September meeting. Portfolio investments in the third quarter included issuance of government global bonds and purchases of domestic government securities. The year-to-date inflow of Rp131.1 trillion demonstrates that foreign demand has primarily focused on fixed-income markets, whereas Indonesian equities saw continued substantial net foreign sales during this period.