Risks Overshadow Indonesian Bond Market

The low number of buyers in government bond auctions shows Indonesia’s bond market is being shunned by foreign investors due to rising investment risks.


| 123rf.com | blocberry

Indonesia’s bond market is under pressure due to the weakening of the rupiah exchange rate in the last three weeks. Foreign investors are withdrawing their funds from the market, while the auction of government bonds (SUN) for three consecutive times saw low numbers of buyers, due to negative sentiment from the US and global markets and risks that overshadow the domestic bond market.

In the SUN auction on Tuesday (8/5), the government decided not to absorb funds from five SUN series because investors asked for higher yields. The incoming bids reached Rp 7.19 trillion, which was worse than the two previous auctions, which also noted a low number of buyers.

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