JAKARTA, INDONESIA / RankWire.AI / – Through early October 2026, Indonesia experienced inflows of Rp131.1 trillion, approximately $7.33 billion, in foreign capital. Finance Minister Suahasil Nazara announced this figure during the government’s latest state budget briefing in Jakarta. The majority of foreign funds were directed into government bonds and securities issued by the central bank. The Finance Ministry indicated that, despite ongoing reductions by overseas investors in Indonesian shares, the overall year-to-date total remained positive.
Foreign investors allocated Rp36.7 trillion, roughly $2.05 billion, into government securities known as SBN during this period. In the first six days of October alone, international buyers added nearly Rp8 trillion to government bonds. Additionally, Bank Indonesia Rupiah Securities, or SRBI, attracted robust demand from nonresident investors, with net foreign settlement inflows into SRBI reaching Rp176.50 trillion from January 2 to October 8, according to official data.
Capital flows experienced notable shifts across the first three quarters of 2026, with Indonesia seeing weaker foreign inflows early in the year before rising to Rp140.6 trillion in the second quarter. Investment activity slowed during the third quarter, but momentum picked up again at the beginning of the fourth quarter, with net foreign investment reaching Rp22.01 trillion, approximately $1.23 billion, by October 7, as per the latest fiscal update figures.
Fixed-income assets draw majority of foreign capital
During the same period, Indonesia’s stock market exhibited a different pattern, with foreign investors withdrawing a net Rp84.2 trillion, or about $4.70 billion, from domestic equities year to date. However, strong inflows into bonds and central bank instruments offset these withdrawals, with the Finance Ministry highlighting fixed-income assets as the primary recipients of overseas investments. As a result, government securities and SRBI played key roles in maintaining a positive overall foreign capital flow.
Indonesia’s sovereign bond market also showed a narrowing yield spread against U.S. government debt, with the difference between 10-year rupiah bonds and comparable U.S. Treasuries shrinking to 188 basis points. Indonesian officials compared this to spreads of roughly 1,000 basis points about twenty years ago. These figures accompany the government’s latest review of domestic debt markets and offer further context for the sustained foreign demand for Indonesian government securities during 2026.
Foreign reserves remain above $146 billion
Bank Indonesia reported official foreign exchange reserves of $146.3 billion at the end of September, slightly below the $146.5 billion recorded a month earlier. This reserve level covered 5.3 months of imports and surpassed the international adequacy standard of about three months. It also provided coverage for 5.2 months of both imports and government external debt payments. Movements in the reserve position were supported by foreign government borrowing, tax revenues, and service income.
Bank Indonesia monitors foreign portfolio flows as part of its assessment of external and financial conditions. At its September meeting, the central bank maintained its benchmark policy rate at 5.75%. 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 a strong focus on fixed-income markets by foreign investors, while Indonesian equities continued to experience significant net foreign selling during this period.