Kemenkeu raises yield to draw capital and support rupiah

Bank Indonesia and the Ministry of Finance are strengthening fiscal-monetary coordination to contain pressure on the rupiah amid capital outflows triggered by higher foreign interest rates. BI Governor Perry Warjiyo said two main steps were agreed at a meeting in Jakarta on Saturday. First, they will make domestic financial instruments more attractive so portfolio funds flow back into shares, SBN, and SRBI. Second, they will maintain adequate money market and banking liquidity by keeping government cash management at BI, along with higher remuneration paid by BI to the government. Finance Minister Purbaya Yudhi Sadewa said the alignment could restore market confidence and help lower production costs for businesses that rely on imported raw materials.