Market Summary

Yield Movements

Between 1 June and 31 August, yields on local currency (LCY) debt securities climbed across all maturities, driven by Bank Indonesia's monetary tightening and inflationary pressures stemming from the ongoing conflict in the Middle East.

Local Currency Bond Market Size and Issuance

LCY debt securities in Indonesia rose by 5.1% quarter-on-quarter (q-o-q) in the second quarter (Q2) of 2026, faster than the 3.8% expansion in the first quarter, to reach a size of IDR8,798.1 trillion at the end of June. Excluding maturities of 1 year or less, bonds outstanding totaled IDR7,525.8 trillion, expanding by a slower pace of 2.1% q-o-q in Q2 versus 2.6% in the prior quarter. Total LCY bond issuance in Q2 tallied IDR328.6 trillion on accelerated growth of 17.1% q-o-q, up from 12.4% in the previous quarter.

Sustainable Bond Market

Indonesia's sustainable bond market expanded 4.8% q-o-q in Q2 to USD18.5 billion, reversing the 0.6% contraction in the first quarter. Sustainable bond issuance more than doubled to USD1.2 billion in Q2, driven largely by sovereign issuance. Sovereign bonds accounted for 69.8% of Indonesia's sustainable bond market at the end of June and were concentrated in bonds with remaining tenors of over 5 years (66.7%), contributing to a lengthening of the market's maturity profile.