Indonesia, which is running a current account deficit, is considered vulnerable to capital outflows when US interest rates rise, as foreigners account for nearly 40 per cent of the country's outstanding government bonds.
"We are offering our bonds to China's central bank," Indonesia's Finance Minister Bambang Brodjenogoro told reporters. "If central banks hold our bonds ... they are not as speculative. They invest for the long term."
The People's Bank of China does not currently hold any Indonesian government bonds, he said.