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Foreign Capital Outflows, But Sentiment Remains Manageable

Bank Indonesia (BI) reported foreign capital outflows of Rp940 billion in the fourth week of October 2025.
This pressure was primarily driven by US dollar strengthening and rising global market uncertainty as the year draws to a close.

However, beneath these outflows, market dynamics show a rotation pattern, rather than a wholesale retreat from Indonesian assets.

Capital Flows: Selling Bonds, Buying Equities
The breakdown reveals varied movements:
* Foreigners sold Rp2.73 trillion in the State Securities market (SBN)
* Sold Rp1.28 trillion in BI Rupiah Securities (SRBI) instruments
* Yet made net purchases of Rp3.08 trillion in the stock market

This pattern illustrates the selectivity of foreign investor strategies, whereby they are reducing exposure to long-term bonds while still seeking opportunities in domestic equities, particularly in sectors offering sustainable growth.

Market Conditions and Exchange Rate
During the same period, the rupiah traded around Rp16,600 per USD, while the 10-year SBN yield remained stable at approximately 5.98%.
Externally, the U.S. Dollar Index (DXY) strengthened to 98.94, pressuring emerging market currencies.

Nevertheless, Indonesia's Credit Default Swap (CDS) remained low at 80.4 bps, reflecting a still-resilient risk perception among global investors.
In other words, current volatility primarily reflects short-term portfolio adjustments, rather than a shift in views on Indonesia's economic fundamentals.

BI Safeguarding Stability Amid Pressures
In response to market volatility, BI reaffirmed its commitment to maintaining rupiah stability and smooth market operations through close policy coordination with the government.
BI's primary focus remains on external stability and resilience of the domestic financial market.

Cumulatively throughout 2025:
- Foreigners sold a net Rp48.36 trillion in stocks
- Sold Rp136.76 trillion in SRBI
- Yet still made net purchases of Rp8.58 trillion in SBN

This combination indicates that although outflows continue, confidence in government bond assets remains relatively resilient.

In the current context, BI's proactive policy approach and strong macro fundamentals, including controlled inflation and low fiscal deficits, have become the primary supporting factors for market stability.
As long as external pressures from the US dollar and US bond yields remain elevated, BI is likely to remain vigilant in balancing stability with support for growth.