Indonesian financial markets staged a sharp rebound after policymakers stepped up engagement with global investors, sending the rupiah higher, bond yields lower and equities surging, Bloomberg reported.
The rupiah climbed as much as 0.9% in its strongest gain in over a year, while the benchmark Jakarta Composite Index advanced 3.4%, reflecting renewed risk appetite. In fixed income, the 10-year government bond yield fell 15 basis points to 7.26% after a sharp two-day rise of as much as 64 basis points.
Investor sentiment improved after Bank Indonesia Governor Perry Warjiyo held a call with US and European investors to address concerns over recent rate actions, with another briefing scheduled for Asian markets. Finance Minister Purbaya Yudhi Sadewa also moved to reassure lawmakers that the government would maintain its budget deficit ceiling.
The coordinated messaging helped stabilise sentiment after weeks of pressure tied to concerns over President Prabowo Subianto’s more interventionist economic stance. Foreign investors have withdrawn a net US$3.7 billion from Indonesian equities and US$594 million from bonds so far this year.
Markets are expected to remain sensitive to further policy signals from Jakarta as authorities work to restore confidence and reverse capital outflows.
