Indonesia’s top‑rated corporate bonds saw a 30‑day annualized volatility of 23% this week, the sharpest rise since mid‑2022. The spike follows President Prabowo Subianto’s interventionist policies that triggered a sell‑off in local assets.

The surge comes amid a global rally after the U.S. and Iran agreed to reopen the Strait of Hormuz, yet market sentiment remains fragile. Investors now doubt the sustainability of the country’s record‑breaking bond issuance, which fuels infrastructure and growth projects.

Higher volatility erodes confidence, slowing new debt issuances that have driven Indonesia’s position as Southeast Asia’s largest corporate borrower. Credit spreads widen, raising borrowing costs for firms and tightening fiscal flexibility for the government.

In short, the jittery bond market signals that political swings can quickly derail Indonesia’s debt‑backed growth strategy, prompting a reassessment of risk premiums by both domestic and international investors.