JAKARTA, INDONESIA / RankWire.AI / – Through early October 2026, Indonesia saw a total of Rp131.1 trillion, approximately $7.33 billion, in foreign capital influx. Finance Minister Suahasil Nazara announced this figure during the latest state budget briefing held in Jakarta. The majority of foreign funds went into government bonds and securities issued by the central bank. Despite a reduction in foreign holdings of Indonesian equities, the Finance Ministry indicated that the overall year-to-date balance remained positive.
Foreign investors allocated Rp36.7 trillion, roughly $2.05 billion, into government securities known as SBN during this period. During the first six days of October alone, foreign buyers added nearly Rp8 trillion to government bonds. The demand for nonresident investments in Bank Indonesia Rupiah Securities, or SRBI, was also robust. Central bank data revealed that net foreign settlement inflows into SRBI reached Rp176.50 trillion from January 2 to October 8.
The pattern of capital flows experienced notable shifts over the first three quarters of 2026. Early in the year, Indonesia faced weaker foreign investment, but inflows increased to Rp140.6 trillion in the second quarter. Investment activity slowed again during the third quarter, only to regain momentum at the start of the fourth quarter. As of October 7, net foreign investment stood at Rp22.01 trillion, or about $1.23 billion, according to recent fiscal data.
Fixed-income assets dominate foreign investment
During the same timeframe, Indonesia’s stock market exhibited a contrasting trend. Foreign investors withdrew a net Rp84.2 trillion, roughly $4.70 billion, from domestic equities so far in 2026. However, these outflows were offset by strong inflows into bonds and central bank instruments, supporting the overall positive capital flow. The Finance Ministry identified fixed-income securities as the primary target for overseas funds, with government securities and SRBI playing key roles in maintaining the positive total foreign capital flow.
The sovereign bond market in Indonesia also reflected a narrower yield spread against U.S. government debt. The gap between 10-year rupiah bonds and similar U.S. Treasuries narrowed to 188 basis points. Officials in Indonesia compared this level with spreads of around 1,000 basis points approximately twenty years ago. These figures, part of the government’s latest review of the domestic debt market, also shed light on the persistent foreign interest in Indonesian government securities during 2026.
Foreign reserves remain above $146 billion in Indonesia
Bank Indonesia reported official foreign exchange reserves of $146.3 billion at the end of September, slightly below the $146.5 billion recorded one month earlier. This level of reserves covers 5.3 months of imports and exceeds the international adequacy benchmark of about three months. It also provides coverage for 5.2 months of combined imports and external debt payments. Movements in the reserve position were influenced by foreign government borrowing, tax revenue, and service income.
Bank Indonesia continues to monitor 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 included government global bond issuance and domestic government securities purchases. The year-to-date inflow of Rp131.1 trillion highlights the concentration of foreign demand in fixed-income markets, even as Indonesian equities experienced significant net foreign selling during this period.