Indonesia’s bond market has grown steadily in recent years to offer a more diversified array of debt instruments to cater to a broader investor base. Foreign investors are allowed to invest in the bond market, subject to regulatory approval. The country’s current legal framework for securitization encourages opportunities for new instruments to be introduced.

As the largest issuer of bonds, the Government of Indonesia regularly taps the local market to finance the state budget.

Corporate bond activities, including conventional and Islamic bond offerings, accelerated significantly beginning in 2003 and have maintained momentum since then. Islamic bonds, which are based on shari'a principles, play a major role in Indonesian capital markets. In April 2008, the Islamic Shari'a Debt Bill was passed into law to enable the Government to issue Islamic bonds.

The current status and expected growth of Indonesian capital markets, and strategies for future development, are detailed in the Indonesian Capital Market Master Plan, which is linked below.