Foreign Investors Hold 37 Percent of Government Bonds

Referring to the Directorate General of Financing and Risk Management (DJPPR) Ministry of Finance website up to December 2016, the ownership of government securities (SBN) was still dominated by foreign investors. Foreign investors purchased more than 37 percent of government-issued SBN, valued at Rp 665.4 trillion. Banks and insurance companies held the next largest portions, with values of Rp 408.3 trillion and Rp 238.2 trillion, respectively.

The significant interest of foreign investors in owning SBN indicates their confidence in the fundamental conditions of the domestic economy. However, this large foreign ownership is highly vulnerable to the risk of sudden and large-scale capital reversals, which can have systemic impacts and further pressure national economic stability.