With a 7 Percent Yield, Indonesian Bonds Remain Attractive

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24/10/2016 10:16 WIB

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10-Year Foreign Bond Yield Imbalance

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The yield on Indonesian government bonds remains quite attractive compared to those of other ASEAN countries, China, the United States, and Japan. On October 21, 2016, the yield on Indonesia's 10-year government bonds was 7.129 percent, the highest among these countries.

This highly competitive yield keeps Indonesian government bonds in demand among both domestic and foreign investors. This is especially true given that Japanese bonds are now yielding below zero, following the implementation of negative interest rate policies in Japan.

Controlled inflation (1.97 percent for January-September 2016) and a stable rupiah exchange rate at around Rp 13,000 per US dollar have caused the yield on Indonesian government bonds to fall by 161.6 basis points. This indicates a decrease in investment risk in Indonesia.

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."