Indonesia establishes a bond stabilization fund to address the depreciation of the rupiah

Golden Ten Data reported on May 8 that, according to Nikkei News, Indonesia’s Minister of Finance stated during a quarterly briefing with the Financial System Stability Committee (KSSK) on Thursday that Indonesia will launch a bond stabilization fund next week to support the rupiah’s exchange rate. The rupiah has depreciated by more than 4% this year, and recently hit a new low against the US dollar. The Finance Minister remarked, “This clearly indicates that funds are flowing out of our bond market.” During the briefing, the minister stated that the fund is expected to lower sovereign bond yields by about 1%. “We are trying to contribute by assisting Bank Indonesia in stabilizing the rupiah’s exchange rate.” He believes that the fund could help alleviate exchange rate fluctuations impacting the rupiah. He added, “We should be able to handle this situation fairly easily.”