Foreign Capital Dynamics in Indonesia's Financial Markets - December 2025

Overview of Capital Flows

In the third week of December 2025, Indonesia's financial markets witnessed contrasting capital flow trends across different investment instruments. Bank Indonesia (BI) reported a net foreign capital inflow of Rp240 billion into the overall financial market for the period of December 15-18, 2025. However, this overall figure masks a significant outflow from government bonds.

Sector-specific Capital Movements

The data revealed that while there was a foreign capital outflow of Rp240 billion from the government bond (SBN) market, there were simultaneous inflows into other financial instruments. Specifically, the stock market saw an inflow of Rp600 billion, while Bank Indonesia's Rupiah Securities (SRBI) attracted Rp260 billion in foreign investment.

Cumulative Capital Flows for 2025

On a year-to-date basis (until December 18, 2025), Indonesia's financial markets recorded significant foreign capital outflows across various asset classes. The cumulative outflows were recorded as follows:

• Stock market: Rp25.04 trillion outflow
• SBN market: Rp2 trillion outflow
• SRBI: Rp112.39 trillion outflow

Risk Perception and Market Indicators

The risk perception of Indonesian assets showed some improvement during the period. The 5-year credit default swaps (CDS) for Indonesia decreased to 69.80 basis points on December 18, 2025, from 71.22 basis points on December 12, 2025. This reduction indicates improving investor sentiment towards Indonesian assets.

Currency and Bond Market Dynamics

The Indonesian Rupiah opened stable at Rp16,710 per USD on Friday, December 19, 2025. The stability in the currency was observed despite the strengthening of the US Dollar Index (DXY) to 98.43 on December 18, 2025. In the bond market, the yield on 10-year SBN decreased to 6.12% from 6.14% in the previous trading session. Similarly, the yield on 10-year US Treasury Notes fell to 4.12% at the close of trading on December 18, 2025.

Bank Indonesia's Policy Stance

BI has reaffirmed its commitment to maintaining economic stability amid these capital flows. The central bank's monitoring of both domestic and international developments suggests a proactive approach to managing potential volatility in the financial markets.