{
    "success": true,
    "data": {
        "id": 1726891,
        "msgid": "economist-bsf-should-serve-as-short-term-stabilisation-buffer-1778244791",
        "date": "2026-05-08 18:31:36",
        "title": "Economist: BSF should serve as short-term stabilisation buffer",
        "author": "",
        "source": "ANTARA_ID",
        "tags": "",
        "topic": "Finance",
        "summary": "Economists recommend positioning the reactivation of the Bond Stabilisation Fund (BSF) as a short-term tool to maintain stability in government bond yields amid current market pressures, including a weakening rupiah and declining foreign ownership of state securities. While acknowledging its relevance in absorbing shocks from excessive selling, experts caution that its effectiveness is limited by fundamental factors like fiscal credibility and warn against risks of moral hazard and market distortions. The government plans to fund the BSF through various sources under the Ministry of Finance to prevent volatility in the domestic debt market and support rupiah stability.",
        "content": "<p>Jakarta (ANTARA) - Head of the Macroeconomics and Finance Centre at\nIndef, M. Rizal Taufikurahman, believes that the government\u2019s\nreactivation of the Bond Stabilisation Fund (BSF) should be positioned\nas a short-term stabilisation buffer to maintain stability in the yields\nof Government Securities (SBN). He warns that the effectiveness of the\nBSF will be limited if the pressure stems from fundamental factors. If\nthe fiscal deficit widens, debt interest burdens increase, the rupiah\ncontinues to weaken, or investor confidence declines, the BSF will not\nbe strong enough to withstand market pressures. \u201cBecause ultimately,\ninvestors still look at fiscal credibility, economic stability, and the\ndirection of government policy,\u201d Rizal said when contacted by ANTARA in\nJakarta on Friday. Rizal also warns of the risks of moral hazard and\nmarket distortions that need to be guarded against so that investors do\nnot become dependent on government interventions. \u201cThe main foundation\nremains strengthening fiscal positions, maintaining rupiah stability,\nand deepening the financial market and domestic investor base,\u201d he said.\nNevertheless, Rizal views the establishment of the BSF as quite relevant\namid the current financial market pressures. The rupiah exchange rate\nhas weakened to around Rp17,400 per US dollar, while the yield on\n10-year SBN has moved in the range of 6.7-7 percent. On the other hand,\nforeign ownership of SBN has fallen to around 12.7 percent as of April\n2026, much lower than several years ago when it was above 30 percent.\nThis condition makes the domestic bond market more sensitive to capital\noutflows and global turbulence. Rizal explains that the BSF can serve as\na shock absorber when there is excessive selling pressure in the SBN\nmarket. This instrument helps ensure that yield spikes are not too\nextreme, thus keeping government debt costs under control. \u201cEven until\nApril 2026, Bank Indonesia has recorded purchases of SBN amounting to\naround Rp111.5 trillion to maintain market and rupiah stability, so the\nneed for additional stabilisation instruments is indeed becoming\napparent,\u201d Rizal said. Contacted separately, Global Markets Economist at\nMaybank Indonesia, Myrdal Gunarto, also views the establishment of the\nBSF as a positive step to maintain stability in the state debt market,\nespecially during turbulent financial market conditions and when Bank\nIndonesia\u2019s (BI) intervention capacity is limited. \u201cIf it\u2019s for this\nBSF, it\u2019s fine in my opinion. It can be a solution. So it\u2019s not just BI\nthat seems to be intervening actively all the time,\u201d Myrdal said. He\nassesses that the BSF is effective when used during strong turbulence in\nthe financial markets, allowing the government to minimise the impact of\ninvestor selling actions in the bond market and maintain SBN yield\nstability. However, Myrdal warns that the effectiveness of the BSF\ngreatly depends on the government\u2019s fiscal capacity and the availability\nof funds, both from the budget surplus (SAL) and other sources. If\nmarket pressure is high while the BSF fund allocation is limited, the\nintervention is deemed at risk of being suboptimal. According to him,\nthe government needs to ensure that fiscal capacity remains maintained\nso that the BSF initiative does not burden the state finances. He also\nemphasises the importance of coordination between the government, BI,\nand other authorities in the Financial System Stability Committee (KSSK)\nin implementing the BSF. Finance Minister Purbaya Yudhi Sadewa plans to\nactivate the Bond Stabilisation Fund to keep the state debt market\nstable and not easily swayed by foreign investors. This step is also\nexpected to prevent turbulence in the domestic financial market and help\nmaintain rupiah exchange rate stability. The funds are prepared to\nstabilise the state debt market by buying back (buyback) SBN in the\nsecondary market released by investors. This strategy is carried out to\nkeep SBN yields stable, so foreign investors holding state debt do not\nsuffer capital losses. Purbaya also mentioned that the Bond\nStabilisation Fund could involve funding sources from institutions under\nthe Ministry of Finance, including special mission vehicles (SMV). \u201cIf\nit\u2019s a real fund, the old design involved several institutions,\nincluding the Ministry of Finance and all SMVs under the Ministry of\nFinance, which can help when we stabilise bond prices. That\u2019s the main\npoint. So, not just SAL,\u201d Purbaya said during a KSSK press conference in\nJakarta on Thursday (7\/5).<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/economist-bsf-should-serve-as-short-term-stabilisation-buffer-1778244791",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}