Outflows Loom for Indonesia as Fed Prepares to Hike Rates
- Outflow from rupiah bonds this quarter highest since 1Q 2020
- Long-end bond valuations remain unattractive despite selloff
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The prospect of an earlier policy tightening by the Federal Reserve is accelerating a selloff in Indonesia’s long-dated bonds.
The spread between the 5- and 10-year sovereign bonds widened to a 14-month high this week. Outflows from its bond markets have already touched $4 billion so far this quarter, on course for the most since the first three months of 2020.