Purbaya Reveals Plans to Reactivate Bond Stabilisation Fund, This is the Purpose

JAKARTA - Finance Minister Purbaya Yudhi Sadewa has revealed that the government plans to reactivate the Bond Stabilisation Fund (BSF). The objective is to safeguard the stability of the government bond market while curbing the recent increases in government bond interest rates. According to Purbaya, the bond stabilisation fund scheme has previously been held by the Ministry of Finance, but it has not been actively operated for some time. “It’s not something new. It already exists but is inactive. I just want to activate it,” Purbaya told the media at Kebun Sirih in Jakarta on Wednesday (6/5/2026). Purbaya emphasised that the BSF in question is an internal instrument of the Ministry of Finance and is not part of the stabilisation scheme under the Financial System Stability Committee (KSSK) framework. “This is my own, belonging to the Ministry of Finance. If it’s said to exist, I’ll just activate it,” he said. Purbaya explained that the reactivation of the BSF is driven by the sharp rise in yields or returns on government bonds over the past few months. Rising yields typically move inversely to bond prices. When yields increase, bond prices fall, potentially causing capital losses for investors holding those debt securities, including foreign investors. According to Purbaya, this situation could trigger further selling if investor losses continue to widen and are not anticipated through market stabilisation. “If bonds fall, foreigners holding bonds here suffer capital losses. In investment institutions, there are rules that if losses reach a certain level, they must reduce holdings. That could trigger outflows. If I keep the bonds stable with a small amount, no one will leave,” he explained. “We’ll coordinate with the central bank later. The form might be different,” Purbaya said. For information, the Bond Stabilisation Fund is an instrument used by the government to intervene in the bond market during extreme pressures, for example, by purchasing debt securities to keep bond prices stable and curb yield spikes.