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The Maturity Of SRBI Debt In Mid-2025 Is Projected To Exceed Rp 100 Trillion, Which Will Have An Impact On The Rupiah

The substantial maturity of Bank Indonesia's Rupiah Securities (SRBI) in May and June 2025 raises concerns regarding its potential impact on the stability of the rupiah exchange rate. 

Josua Pardede, Chief Economist at Bank Permata, observed a significant decline in foreign investor ownership of SRBI, which fell to 24.27% by the end of December 2024. He indicated that this decrease reflects a waning interest from foreign investors in SRBI. 

"This situation could heighten the risk of a depreciation in the rupiah if there is a capital outflow at the time of maturity," Josua stated in an interview with Kontan on Friday, January 10. Furthermore, he noted that the increase in SRBI yields to 7.3% for a 12-month tenor by the end of 2024 signifies a higher risk premium, amid a globally uncertain environment. 

Despite the rise in yields, the strengthening of the US dollar against global currencies, coupled with a risk-off sentiment, poses a significant barrier to attracting additional investors. 

Consequently, it is deemed essential for Bank Indonesia to undertake substantial interventions to maintain the stability of the rupiah, particularly in light of the prevailing global uncertainties. 

"Such global sentiments include the hawkish policies from the Federal Reserve and threats of trade tariffs," he elaborated. 

Josua also expressed concern that the rising SRBI yields could potentially lead to a crowding-out effect on the yields of Government Securities (SBN), which are also on the rise. 

For instance, the widening spread between the 12-month SRBI yield and SBN reflects the market's demand for higher risk compensation. 

He anticipates that the yield on 10-year SBNs will increase to approximately 7.3% in the second quarter of 2025, coinciding with the peak maturity of SRBI, which will drive greater liquidity demand from the market. With the SRBI maturing in mid-2025 exceeding Rp 100 trillion, it is expected that Bank Indonesia will continue to conduct new SRBI auctions, albeit with limited increases in the auction amounts. 

Tag: Bank Indonesia SRBI