Indonesia’s five-year bond yield climbed to the highest level in more than six years as a debt market selloff deepened.
The yield rose eight basis points on Tuesday to 7.42%, a level last seen in May 2020. The rupiah was little changed, while the benchmark stock index gained more than 1%.
The central bank said on Saturday it’s working with the government to boost returns on state debt as policymakers step up efforts to lure inflows. Bank Indonesia, which had been buying bonds in the secondary market as part of its currency intervention, was absent on Monday, according to traders.
Indonesia is coming under increasing strain as global investors flee the nation’s assets. President Prabowo Subianto’s interventionist economic agenda and spending plans are adding to concerns over an upcoming review by MSCI Inc. on whether to keep the nation’s stocks in a key index.
The market selloff picked up momentum last week as lawmakers expanded supervision of the central bank, a corruption probe was launched, and new rules governing commodity exports were unveiled. - Bloomberg
