Jakarta. Foreign investors posted a net outflow of Rp 7.71 trillion ($455.6 million) from Indonesia’s financial markets in the second week of January, driven by sales of government bonds, even as equities saw inflows and the rupiah showed modest stability.

Bank Indonesia (BI) said the outflows occurred during the Jan. 12–14 trading period and were driven mainly by selling in government bonds and central bank securities. Net foreign outflows from government bonds (SBN) reached Rp 8.15 trillion, while holdings of Bank Indonesia rupiah securities (SRBI) declined by Rp 2.64 trillion.

Those losses were partially offset by inflows into equities, where foreign investors posted a net purchase of Rp 3.08 trillion over the same period. Overall, however, Indonesia’s financial markets still registered a net foreign outflow of Rp 7.71 trillion, BI data showed.

Since the start of the year through Jan. 14, foreign investors have recorded cumulative net inflows of Rp 5.33 trillion into SRBI and Rp 6.16 trillion into stocks. In contrast, the government bond market has seen net foreign outflows totaling Rp 9.91 trillion so far this year.

Investor risk perception toward Indonesia also edged higher. The country’s five-year credit default swap (CDS) premium — a key gauge of sovereign risk — rose to 71.43 basis points on Jan. 14 from 69.31 basis points five days earlier.

The rupiah showed modest resilience on Thursday, opening slightly stronger at Rp 16,840 per dollar, compared with Wednesday’s close of Rp 16,855. The move came as the US dollar index, which tracks the greenback against six major currencies, weakened to 99.06 at the end of Wednesday’s session.

Bond markets reflected diverging trends. Yields on Indonesia’s 10-year government bonds rose to 6.23% on Thursday from 6.21% a day earlier, while yields on the US 10-year Treasury note fell to 4.132% on Wednesday, according to BI data.

Ramdan Denny Prakoso, executive director of Bank Indonesia’s communications department, said the central bank continues to strengthen coordination with the government and other authorities while optimizing its policy mix to safeguard the country’s external economic resilience.

Yusuf Rendy Manilet, an economist at CORE Indonesia, said US monetary policy remains the dominant external driver.

“When the Federal Reserve maintains interest rates at high levels, US dollar-based financial assets become more attractive to global investors,” Yusuf said. “This encourages capital outflows from emerging markets, including Indonesia, toward the United States.”

That shift has boosted demand for the US dollar, putting pressure on the rupiah and other regional currencies. External headwinds have intensified amid rising geopolitical tensions early in 2026, including conflict escalation in Venezuela, strained relations between China and Taiwan, and developments in the Greenland region, Yusuf added.

“These conditions prompt global investors to adopt a more defensive stance and rebalance portfolios toward safe-haven assets such as the US dollar and developed-market government bonds,” he said.

On the domestic front, Indonesia’s reliance on imports — particularly for energy, raw materials and capital goods — keeps demand for foreign currency elevated. When global pressures rise and export performance is insufficient to offset import needs, the current account balance can deteriorate, adding further strain on the rupiah.

Fiscal concerns have also weighed on sentiment. Yusuf said last year’s budget deficit, which approached Indonesia’s statutory ceiling of 3% of gross domestic product, has drawn investor attention.

“In a global environment filled with risk, even relatively small negative signals can be amplified by markets and translate into currency depreciation,” he said.

Despite the recent volatility, Yusuf stressed that there is no single exchange-rate level that automatically signals a crisis. Economic stress, he said, is determined by a combination of factors, including the speed and persistence of currency weakening, foreign exchange reserve levels, the scale of capital outflows, inflationary pressures from higher import prices, foreign-currency debt burdens and overall market confidence in policy responses.

If current pressures persist without an improvement in sentiment or adequate policy measures, the impact is more likely to take the form of a gradual economic slowdown rather than a sudden crisis, Yusuf said. Rising import prices could lift inflation and weigh on household consumption, posing a challenge for policymakers seeking to balance growth and stability.

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