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Indonesian Bonds Get Further Ahead of India Debt With Policy Gap

  • Spread between rupee and rupiah debt rise on policy deviation
  • Rupiah debt offer highest real yields in major EM Asia markets
Updated on

The fortunes of two high-yielding emerging Asian bonds are set to diverge further, with Indonesian notes set to outperform Indian peers driven by central banks’ deviating policies.

The spread between 5-year Indonesia and India sovereign bonds is set to widen from 63 basis points, which is already the highest in more than three years. While Indonesia continues to buy bonds with targeted purchases of 224 trillion rupiah ($16 billion) for 2022, India halted the scheduled bond purchase program last year and has been mopping up excess liquidity.