Jakarta. Indonesian stocks posted their strongest weekly gain in months, with the benchmark Jakarta Composite Index (JCI) climbing 4.24% in the week ended July 17 as investors welcomed Bank Indonesia's assessment that the country's external debt remains healthy despite mounting geopolitical tensions in the Middle East.

The JCI closed at 6,175.535, up from 5,924.360 a week earlier, while the Indonesia Stock Exchange's (IDX) market capitalization rose 3.95% to Rp 10,749 trillion ($599 billion) from Rp 10,340 trillion.

Trading activity also strengthened significantly during the week. Average daily transaction value surged 36.25% to Rp 13.99 trillion from Rp 10.27 trillion the previous week. Average daily trading volume increased 27.75% to 26.17 billion shares, while the average number of daily transactions jumped 24.6% to 2.33 million, reflecting stronger investor participation.

Investor sentiment was supported by Bank Indonesia's latest assessment that the country's external debt remains manageable. The central bank said Indonesia's debt-to-GDP ratio stood at 30.6%, with 84.6% of external borrowings consisting of long-term debt, helping contain refinancing risks. Bank Indonesia also pledged to continue coordinating with the government to ensure external borrowing remains productive and sustainable amid global economic uncertainty.

Brokerage Pilarmas Investindo Sekuritas said the data suggested the government continues to rely on external financing to support the state budget and development while maintaining prudent debt growth.

"Indonesia's external debt continues to grow at a measured pace, while its structure remains healthy as it is dominated by long-term borrowings and the debt-to-GDP ratio remains relatively low, keeping refinancing risks manageable," the brokerage said in a research note.

Pilarmas cautioned that a weaker rupiah and persistently high global interest rates could raise debt servicing costs going forward. However, it said the current pace of external debt growth is unlikely to threaten Indonesia's economic stability as long as the funds are directed toward productive sectors and fiscal discipline is maintained.

Foreign investors returned as net buyers on Friday, purchasing a net Rp 638.05 billion worth of Indonesian equities. Despite the daily inflow, overseas investors have remained net sellers this year, recording cumulative net sales of Rp 75.71 trillion since the start of 2026.