Indonesia says bond yields remain relatively safe after rise to 7.446%

Indonesia's Finance Ministry said government bond yields remained relatively safe after the 10-year yield climbed to 7.446% at the close on 21 October 2026, according to Refinitiv data. The increase followed MSCI's announcement of a consultation on a possible downgrade of Indonesia's equity market classification.

Speaking to reporters on 22 October, Herman said yields were still competitive compared with those in European countries and expressed confidence in Indonesia. Refinitiv put the yield on Germany's 10-year government bond at 3.3546%.

Herman did not explain whether the 2026 state budget could accommodate the higher yields. The government had set its 10-year government bond interest-rate assumption at 6.9%.

MSCI announced on 16 October that it would consult on whether to reclassify Indonesia from Emerging Market to Standalone Market status. It cited limited transparency over share ownership, suspected coordinated trading and a lack of sufficiently meaningful enforcement results.

Although Indonesian capital-market authorities had announced corrective measures, MSCI said consistent results were not yet evident. A final decision on the possible reclassification is due by 30 June 2027, giving Indonesia time to demonstrate improvements.

Following the announcement, Indonesia's benchmark stock index, the IHSG, fell sharply over two trading sessions. The rupiah also remained under pressure against the US dollar.