JAKARTA, INDONESIA / RankWire.AI / – Through early October 2026, Indonesia has seen foreign capital inflows totaling Rp131.1 trillion, approximately $7.33 billion. Finance Minister Suahasil Nazara announced this figure during the government’s most recent state budget presentation in Jakarta. The majority of these foreign investments have been directed into government bonds and securities issued by the central bank. The Ministry of Finance highlighted that, despite ongoing reductions by overseas investors in Indonesian equities, the total remains in positive territory for the year so far.
During 2026, foreign investors allocated Rp36.7 trillion, roughly equivalent to $2.05 billion, into government securities known as SBN. Notably, 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, continued to attract robust interest from nonresident investors, with net foreign settlement inflows into SRBI reaching Rp176.50 trillion from January 2 to October 8, according to official figures.
The movement of capital in Indonesia showed significant fluctuations across the first three quarters of 2026. Early in the year, foreign flows were relatively weak, but they surged to Rp140.6 trillion in the second quarter. Investment activity then slowed down during the third quarter, only to rebound at the beginning of the fourth quarter. As of October 7, net foreign investment had reached Rp22.01 trillion, or about $1.23 billion, as per the latest fiscal data presented.
Fixed-income assets draw the majority of foreign capital
In contrast to the bond inflows, Indonesia’s stock market experienced a net foreign outflow of Rp84.2 trillion, approximately $4.70 billion, so far this year. However, strong inflows into bonds and central bank instruments offset these withdrawals, resulting in an overall positive foreign capital balance. The Ministry of Finance emphasized that fixed-income assets have been the primary target for foreign investors, with government securities and SRBI playing key roles in maintaining the overall surplus of foreign capital flows.
The sovereign bond market in Indonesia also reflected a narrowing yield spread relative to U.S. government debt. The difference between 10-year rupiah bonds and comparable U.S. Treasuries shrank to 188 basis points, a significant reduction from the approximately 1,000 basis points spread seen around twenty years ago. These figures align with the government’s latest review of the domestic debt market and help explain the sustained foreign appetite for Indonesian government securities during 2026.
Indonesia’s foreign reserves stay above $146 billion
Bank Indonesia announced that its official foreign exchange reserves stood at $146.3 billion at the end of September, slightly below the $146.5 billion reported in August. This level of reserves covers 5.3 months of imports, exceeding the international adequacy standard of around three months, and also sufficiently covers 5.2 months of combined imports and external debt payments. Movements in reserves are influenced by factors such as foreign government borrowing, tax revenue, and income from services.
As part of its ongoing assessment of external and financial conditions, Bank Indonesia monitors foreign portfolio flows. The central bank maintained its benchmark policy rate at 5.75% during its September meeting. During the third quarter, portfolio investments 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 predominantly targeted fixed-income markets, whereas Indonesian equities continued to experience substantial net foreign selling during the same period.