Finance Minister: Government enters bond market to stabilise rupiah

Finance Minister Purbaya Yudi Sadewa has confirmed that various measures are being taken to help stabilise the rupiah exchange rate, including more active involvement in the bond market. “We have entered the bond market gradually. Foreign investors have also entered, so things should become more stable in the coming weeks,” said Minister Purbaya following a limited meeting with President Prabowo Subianto at the Presidential Palace Complex in Jakarta on Monday.

“I will enter the bond market every day,” the Minister added. The government plans to implement a Bond Stabilisation Fund scheme using available budgets. When asked about the volume of funds to be injected, Purbaya stated that he is requesting Rp2 trillion to enter the bond market daily. Regarding the source of these funds, Purbaya explained, “We still have several places; that is just cash management. So, it is not a problem.”

He noted that the circulation of money in the bond market is projected to drive positive sentiment, which typically encourages foreign capital to enter the market. Previously, on Tuesday (12/5), Minister Purbaya stated he was prepared to stabilise the bond market by maintaining the yields of Government Securities (SBN) to help mitigate pressure on the rupiah exchange rate. The intervention in the bond market is intended to prevent excessive rises in SBN yields. Purbaya warned that excessive yield increases could trigger capital losses for foreign investors and drive capital outflows. At the close of today’s trading, the rupiah exchange rate weakened to Rp17,668 per US dollar from the previous Rp17,597 per US dollar.