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Foreign investors step back into Indonesian assets as stability returns
Foreign funds have bought Indonesian bonds for a fourth straight month, and the rupiah has gained more than 3.5% from its June record low.
Global investors are slowly returning to Indonesian markets after earlier turmoil, according to LiveMint Markets, as local assets rebound and policymakers move to restore confidence.
The outlet reports that foreign funds have been buying Indonesian bonds for a fourth straight month, the rupiah has appreciated by more than 3.5% from June’s record low, and Indonesian stocks are set for their first quarterly inflow of 2026. Money managers including Invesco Ltd. and PPM America Inc. have reduced underweight positions in Indonesian assets.
Policy changes are part of the pullback, with President Prabowo Subianto pledging to rein in the budget deficit, regulators rolling out measures tied to MSCI Inc.’s concerns over market transparency, and newly appointed Bank Indonesia Governor Destry Damayanti signaling she will continue current policy.
Still, investors are cautious, the report says, citing doubts about policy execution and a tougher global backdrop. Renewed US-Iran hostilities have pushed up oil prices, while expectations of Federal Reserve interest rate hikes also add risk, and the Jakarta Composite Index remains down almost 23% for 2026 even after a 25% jump from an early June low.