Indonesian government bonds recorded their largest foreign inflows in over seven years, driven by a strengthening rupiah and expectations of steady interest rates after a 100-basis-point hike earlier this year. Global funds purchased a net $656.7 million of the nation’s debt on Thursday — the highest single-day inflow since July 2019 — according to the latest finance ministry data. This brings total net foreign purchases for August to $931.74 million, marking the third consecutive month of inflows.

The rally reflects growing confidence in Indonesia’s fiscal and monetary policy outlook. Foreign investors are increasingly allocating capital to emerging market debt as global yield curves flatten and safe-haven demand wanes. The stronger rupiah, which has appreciated over 5% against the US dollar this quarter, enhances the appeal of local currency assets.

The move underscores the sensitivity of emerging market bonds to currency stability and central bank signaling. With inflation pressures easing, Bank Indonesia is widely expected to hold rates steady in upcoming policy meetings, further supporting bond market stability.