Foreign Capital Inflows Rise as Purbaya Predicts Rupiah to Strengthen
Minister of Finance Purbaya Yudhi Sadewa is optimistic the rupiah exchange rate could strengthen again after the government observed foreign capital inflows beginning to enter the Indonesian bond market. He said the government has taken steps to maintain the stability of the domestic financial market amid global pressures and the rupiah’s weakness. One of the measures is through purchases of bonds in the secondary market.
“The rupiah will not stay at this (low) level for too long. We have seen sentiment improving in the bond market; funds are starting to come in here, and I think more will come in the future, so the rupiah should strengthen,” Purbaya said at the APBN KiTa May 2026 edition press conference in Jakarta, Tuesday, 19 May 2026, as reported by Antara.
As a note, the rupiah closed weaker by 38 points or 0.22%, at Rp17,706 per US dollar, from Rp17,668 previously.
Purbaya said the government has been entering the bond market since last week to dampen pressure and safeguard investor confidence. The move, he said, is starting to affect a drop in government bond yields.
Purbaya explained foreign investors are returning to the bond market, both in secondary and primary markets. In the secondary market, foreign funds entered around Rp500 billion, while in the primary market around Rp1.68 trillion. He regards this foreign inflow as an early signal of a recovery in investor confidence in Indonesia’s debt market.
“So, our actions to stabilise the bond market have already managed to restore foreign investor confidence in our bonds; they are starting to come in, the dollar should follow, right?” he added.
The state treasurer continues to monitor foreign inflows into the bond market. He said he routinely coordinates with Suminto, the Director General of Financing and Risk Management at the Ministry of Finance, to track capital movements.
Separately, Purbaya assured that the government will not alter the rupiah exchange-rate assumptions in the 2026 State Budget (APBN). The world oil price assumption remains at $100 per barrel.
“I don’t have to change anything further. We have carried out savings that we believe are sufficient for the current situation, including the rupiah, which has shifted; we did the simulations in time,” Purbaya said.