Jakarta. Finance Minister Purbaya Yudhi Sadewa plans to activate a bond stabilization fund to support the rupiah and cushion Indonesia’s government bond market from mounting global financial pressures as sovereign bond yields continue to climb.

The fund will be used to stabilize the government securities (SBN) market, particularly when rising yields push bond prices lower and trigger potential capital losses for investors.

“I will try to help the rupiah in my own way,” Purbaya said in Central Jakarta on Wednesday.

Purbaya said the bond stabilization fund is not a new instrument, but one that has long existed without being actively utilized.

“It’s not something new, but it was never implemented. It existed, but it was dormant. I just want to revive it,” he said.

He stressed that the scheme differs from the bond stabilization framework managed by the Financial System Stability Committee (KSSK), saying the program would be fully controlled by the Finance Ministry.

“This is my own initiative, not the framework. The bond stabilization fund belongs to the Finance Ministry,” Purbaya said.

According to Purbaya, pressure in the domestic bond market has intensified since the start of 2026 as SBN yields surged sharply. Rising yields have driven bond prices lower, increasing the risk of capital losses for investors.

“If you look at the past few months, yields have risen sharply since January. When I injected liquidity, yields were briefly at 5.9%, then moved up to 6.1%, and now they are around 6.7%. When yields rise, bond prices fall,” he said.

He warned that losses on bond holdings could encourage foreign investors to reduce exposure to Indonesian government debt, potentially triggering further capital outflows and additional pressure on the rupiah.

“Foreign investors holding bonds here are facing capital losses. Many investment institutions have internal rules requiring them to cut positions once losses reach certain thresholds. That can trigger selling,” Purbaya said.

To prevent deeper declines in bond prices, the government plans to use the stabilization fund to purchase SBN in the secondary market when needed. The measure is aimed at maintaining market confidence and limiting foreign outflows.

“If I can support the bond market from below, even with a relatively small amount, then investors will not leave,” he said.

Purbaya did not disclose the size of the fund, saying the amount would depend on market conditions and ongoing coordination with Bank Indonesia.

“We still don’t know yet. We will continue coordinating with the central bank,” he said.

He added that the funding could come from various government budget allocations, although he did not specify whether the money would come directly from the state budget or other Finance Ministry resources.

“The budget can be sourced from various allocations. We have the funds,” Purbaya said.

The bond stabilization fund is expected to begin operating as early as Thursday. The government hopes the program will help stabilize the SBN market, curb foreign capital outflows, and support the rupiah amid heightened global economic uncertainty. “It will start on Thursday,” Purbaya said.

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