Yield Government Bonds Drop, Reflects The Decreased Risk Of Investment In Indonesia

Minister of Finance Purbaya Yudhi Sadive (Photo: Doc. VOI)

Minister of Finance Purbaya Yudhi Sadive said the decrease in bond yields was able to reduce debt interest expense while maintaining investor interest, both from within and outside the country.

Meanwhile, the government bond yields fell significantly, amounting to 88 basis points (bps) year-to-date (ytd).

Based on data from the last auction of Government Securities (SUN) as of October 7, 2025, the 10 year tenor SBN yield was recorded at 6.77 percent (ytd). This figure is still within the range of assumptions that the APBN targets the 10 year SBN yield at the level of 6.7 percent.

"This makes, a positive signal that the risk perception of Indonesia is decreasing. At the same time, it reflects the effectiveness of our policy mix in maintaining the stability and attractiveness of the domestic debt market," he said at a press conference on our State Budget, Tuesday, October 14.

Furthermore, he stated that the level of investor confidence in Indonesian debt securities is currently in good condition.

According to him, this is considered an advantage because the government can issue debt securities with lower interest rates, thereby reducing the cost of capital (cost of capital).

"So trust in Kuta's debt securities is good. I think it's profitable, why? Because later the issuance of interest bonds is cheaper. So my cost of capital is cheaper than before," he said.

Purbaya also considered that this condition reflected investor optimism both foreign and domestic on Indonesia's economic prospects which were considered stable and had a better chance of growing in the future.

For information, as of June 2025, the total government debt reached IDR 9,138.05 trillion, with a ratio to gross domestic product (GDP) of 39.86 percent.

According to data from the Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance, the total debt consists of loans of IDR 1,157.18 trillion and Government Securities (SBN) worth IDR 7,980.87 trillion. This figure is slightly lower than the position in May 2025 which was recorded at IDR 9,177.48 trillion.