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JAKARTA – Indonesia’s financial markets are grappling with significant foreign capital outflows in early 2026, as investors pulled billions from equities and government bonds.
Yet, Bank Indonesia’s strategic push on rupiah securities (SRBI) has managed to offset the turbulence, turning the tide toward net inflows by May.
Heavy Outflows in Q1 2026
Foreign investors withdrew Rp26.06 trillion from equities and Rp25.10 trillion from government bonds in the first quarter.
The exodus reflected global risk aversion amid geopolitical uncertainty and shifting monetary policies abroad.
At the same time, SRBI attracted Rp29.85 trillion in inflows, underscoring the central bank’s success in positioning its short-term instruments as a safe haven.
April–May Reversal
The second quarter brought a mixed picture:
– Equities: April saw Rp12.49 trillion in outflows, but May reversed the trend with Rp10.91 trillion in inflows. Year-to-date, equities remain in net outflow of Rp27.64 trillion.
– Government bonds: April recorded Rp13.36 trillion in inflows, followed by Rp1.54 trillion in May, trimming the year-to-date outflow to Rp10.19 trillion.
– SRBI: Inflows surged further, reaching Rp105.16 trillion by May, cementing SRBI as the strongest magnet for foreign capital.
Net Portfolio Position
Despite the rocky start, Indonesia posted a net inflow of Rp67.33 trillion year-to-date.
This turnaround was achieved after Q1’s Rp21.30 trillion outflow was offset by Rp49.14 trillion in April and Rp39.50 trillion in May.
Bank Indonesia Governor Perry Warjiyo emphasized that raising SRBI yields was key to attracting foreign funds and bolstering domestic foreign exchange supply.
He expressed optimism that global demand pressures would ease by June, reducing the need for heavy intervention.
Policy and Market Implications
Global backdrop: Heightened geopolitical tensions and volatile interest rate expectations have driven capital flight from emerging markets.
Domestic impact: Persistent equity outflows highlight investor caution, while SRBI inflows underscore reliance on central bank instruments for liquidity stability.
Policy outlook: BI’s strategy of boosting SRBI yields reflects a balancing act maintaining inflows while managing inflation and currency stability.
Indonesia’s financial markets face a delicate equilibrium.
While foreign investors remain cautious about equities and bonds, SRBI has emerged as a crucial stabilizer, drawing in substantial inflows and supporting the rupiah.
The net inflow of Rp67.33 trillion offers temporary relief, but the sustainability of this trend hinges on global market conditions and BI’s ability to maintain confidence.
