May 20, 2026
JAKARTA – The Finance Ministry is injecting Rp 2 trillion (US$113 million) a day into the domestic bond market in a bid to steady the rupiah, stem foreign capital outflows and reduce financial market volatility after the currency slid to a record low.
The intervention comes after the rupiah dropped below 17,700 per the United States dollar in spot trading on Tuesday, extending losses from the preceding day as global and domestic economic pressures weighed on sentiment.
Finance Minister Purbaya Yudhi Sadewa said the government had begun to gradually buy sovereign bonds to shore up investor confidence and stabilize debt prices.
“We have entered the bond market gradually. Foreign investors have also started coming back, so conditions should stabilize in the coming weeks,” he told reporters at the State Palace on Monday.
“I asked for Rp 2 trillion to [inject into] the bond market every day,” Purbaya said, without providing details on how the intervention was being carried out.
President Prabowo Subianto was expected to formally outline the broader economic stabilization strategy before the House of Representatives soon, he added.
Purbaya said the intervention would be financed through government cash management, drawing partly from the accumulated budget surplus (SAL), which currently stood at Rp 420 trillion.
He added that the SAL, which derives from excess budget financing over previous fiscal years, gave the government ample liquidity to sustain the purchases without affecting state expenditure.
“This is purely cash management, so there is no issue. The money is not disappearing. We are simply rotating funds to create more positive sentiment in the bond market,” the minister explained.
He also underlined that the government would monitor market conditions to determine how long the daily intervention would continue.
The government hopes its role as a steady buyer in the bond market will underpin bond prices and push down yields, making local debt more attractive to investors at a time of heightened global uncertainty.
“When sentiment improves, foreign investors tend to follow,” Purbaya said. “If they stop selling bonds and leaving because prices stabilize, the rupiah will also be more contained.”
The rupiah depreciation has added to pressure on the stock market: The Indonesia Stock Exchange (IDX) Composite index slipped again as the market opened on May 19 and was down more than 3 percent heading into the midday trading break.
Bank Indonesia (BI) Governor Perry Warjiyo has said the central bank expected the rupiah to average around 16,800 per dollar this year, which was within the 16,500-16,900 range as set in the state budget, and that the exchange rate might improve in July and August.
BI had “increased the dosage” of its currency intervention, Perry told a meeting on Monday with House of Representatives Commission XI overseeing financial affairs. He also pledged to take additional steps as necessary to arrest the currency’s fall ahead of the central bank’s monthly policy meeting this week.