Indonesia Buys $2.22 Trillion Rupiah in Bonds to Support Rupiah

In a decisive move to bolster the Indonesian Rupiah, the Ministry of Finance has actively intervened in the secondary bond market, purchasing State Securities (SBN) worth Rp 2.22 trillion. This strategic intervention, which began last week, underscores the government's commitment to maintaining currency stability amidst market pressures. Minister of Finance Purbaya emphasized that by stabilizing bond prices and yields, the ministry aims to encourage foreign capital inflow, thereby supporting the Rupiah's value.

The Ministry's proactive stance is evident in the detailed breakdown of purchases: Rp 100 billion on May 13, Rp 830 billion on May 18, and Rp 1.29 trillion on May 19, 2026. Minister Purbaya's statement, "If they sell, I buy," reflects a determined effort to absorb selling pressure and signal confidence in the market. He asserted that this intervention has already successfully attracted approximately Rp 500 billion in capital inflow in the secondary market and Rp 1.68 trillion in the primary market, demonstrating the effectiveness of the strategy.

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If they sell, I buy. So foreigners are not selling (bonds). Why? Because if the bond price is stable, the yield is stable, they (foreign capital) will come here.

This operation is part of a broader treasury management strategy, as explained by Suminto, Director-General of Debt Management and Risk. The purchases are considered temporary, with the securities available for resale, ensuring flexibility in managing liquidity. The government maintains substantial resources, with a budget surplus (SAL) of around Rp 430 trillion, and has allocated Rp 2 trillion per day for these market operations. This financial capacity provides a strong foundation for continued intervention if necessary.

From an Indonesian economic perspective, these actions are crucial for maintaining investor confidence and ensuring macroeconomic stability. The Rupiah's value is a key indicator of economic health, and its depreciation can lead to increased import costs and inflationary pressures. By actively managing the bond market, the Ministry of Finance is not only defending the currency but also signaling to international investors that Indonesia remains a stable and attractive destination for investment. This proactive approach is vital for navigating global economic uncertainties and fostering sustainable growth.

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So that is a temporary purchase that can be sold again later, so it is not a permanent buyback. But the purchase of SBN that can be used for treasury operations, including being sold back.