Jakarta bond decision pending as ministry flags interest-rate risk
The Finance Ministry says it has suggested other funding options that would lower Jakarta’s costs, but has not disclosed details.
Jakarta’s municipal bond proposal remains without a specific decision, Indonesia’s Finance Ministry has indicated, pointing to the possibility of high borrowing costs. Finance Minister Suahasil Nazara and Jakarta Governor Pramono Anung discussed the proposal at a meeting on 27 October 2026.
Speaking to CNBC Indonesia on 28 October 2026, the ministry’s director-general of fiscal balance, Nufransa Wira Sakti, said global geopolitical and macroeconomic conditions could force Jakarta to offer high interest rates. The ministry had suggested alternative sources of financing that would involve lower costs, he said, without identifying them.
Pramono said separately that the provincial government would comply fully with the central government’s guidance and decision on municipal bonds. He did not give further details of the talks or the proposed borrowing amount.
Officials had previously outlined different borrowing plans. In August 2026, Suharini Eliawati, an assistant for economic and financial affairs at Jakarta’s regional secretariat, described a phased issuance of Rp4.2 trillion in 2027 and Rp1.3 trillion in 2028. Pramono subsequently announced a target in September 2026 to issue Rp3.5 trillion in June 2027.
According to Pramono, the bond proposal was submitted under Jakarta’s 2027 budget policy and provisional spending priorities. It was intended as another funding source for infrastructure development and public-service projects.
The planned bonds would carry a maximum term of seven years, with coupons to be set according to financial-market conditions when they are issued.
