JAKARTA, INDONESIA / RankWire.AI / – Indonesia’s foreign capital inflows totaled Rp131.1 trillion, approximately $7.33 billion, through early October 2026. Finance Minister Suahasil Nazara announced this figure during the government’s latest state budget briefing held in Jakarta. The majority of foreign investments were directed into government bonds and securities issued by the central bank. The Finance Ministry stated that the overall total remained positive for the year, despite overseas investors continuing to reduce their holdings in Indonesian equities.
Foreign investors allocated Rp36.7 trillion, roughly $2.05 billion, into government securities known as SBN during the year. During the first six days of October alone, foreign buyers added nearly Rp8 trillion to government bonds. Additionally, Bank Indonesia Rupiah Securities, or SRBI, attracted robust demand 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 movement of capital showed significant variation across the first three quarters of 2026. Indonesia experienced weaker foreign inflows early in the year before seeing an increase to Rp140.6 trillion in the second quarter. Investment activity then slowed down in the third quarter. However, foreign inflows picked up again at the beginning of the fourth quarter, with net foreign investment reaching Rp22.01 trillion, about $1.23 billion, by October 7, as per the latest fiscal update figures.
Most foreign funds were 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 around $4.70 billion, from domestic equities year to date. Nonetheless, strong inflows into bonds and central bank instruments offset these withdrawals, keeping the overall foreign capital flow positive. The Finance Ministry highlighted fixed-income assets as the primary recipients of overseas funds, with government securities and SRBI playing a dominant role in maintaining the positive trend.
In Indonesia’s sovereign bond market, the yield spread against U.S. government debt narrowed. The gap between 10-year rupiah bonds and comparable U.S. Treasuries decreased to 188 basis points. Indonesian officials compared this figure to spreads of around 1,000 basis points from roughly twenty years ago. These figures were part of the government’s latest assessment of the domestic debt markets and offer further context for the sustained foreign interest in Indonesian government securities throughout 2026.
Indonesia’s foreign reserves remain above $146 billion
Bank Indonesia reported official foreign exchange reserves of $146.3 billion at the end of September, slightly down from $146.5 billion recorded a month earlier. These reserves cover 5.3 months of imports and surpass the international adequacy benchmark of about three months. They also encompass 5.2 months of combined imports and external debt payments. Movements in the reserve position are influenced by foreign government borrowing, tax revenues, and service income.
Bank Indonesia monitors foreign portfolio flows as part of its assessment of financial and external conditions. The central bank maintained its benchmark policy rate at 5.75% during its September meeting. Portfolio investments in the third quarter comprised government global bond issuance and purchases of domestic government securities. The year-to-date inflow of Rp131.1 trillion underscores the focus of foreign demand on fixed-income markets. Conversely, Indonesian equities continued to experience significant net foreign selling during the same period.