EL7.AI
BondsMedium•28 October 2026•
2 min read

Indonesia’s 10-year bond yield hits 7.66%, highest since 2022

Key Facts

1Indonesia’s 10-year government bond yield reached 7.66% on October 28, 2026, its highest level since October 2022.
2MSCI opened its consultation on reclassifying Indonesia on October 15, 2026.
3Bank Indonesia kept its benchmark rate at 5.75% for the fourth consecutive time and raised its deposit facility rate by 25 basis points.
4Indonesia recorded a trade surplus of 3,552.200 million dollars in August 2026.
5MSCI set April 30, 2027, for comments and June 30, 2027, as the latest date to announce its decision.

Indonesia’s 10-year government bond yield rose to 7.66% on October 28, 2026, its highest level since October 2022, according to Trading Economics. That puts the cost of sovereign borrowing at its highest point in four years. The market report linked the rise to elevated U.S. Treasury yields ahead of the Federal Reserve’s interest-rate decision. It also cited local concerns related to MSCI’s proposal, public spending and oil prices.

MSCI concerns matter because foreign capital flows could be affected, but the proposal remains under consultation. The company opened the consultation on October 15, 2026, on moving Indonesia from emerging-market status to standalone market status. MSCI said investor concerns include continued uncertainty over ownership structures and suspected coordinated trading. The proposal means Indonesia’s status in global indexes remains under review. A final decision has not yet been issued, and the company has set later dates for receiving feedback and announcing the outcome.

While the consultation continues, MSCI has kept certain changes related to Indonesian securities frozen until further notice. The freeze includes no increases to foreign inclusion factors or the number of shares used in indexes. The company is also not adding securities to the MSCI Indonesia IMI during the freeze. These measures limit changes to index constituents for now. MSCI said it will continue applying the existing freeze until it informs investors of an update.

On monetary policy, Bank Indonesia kept its benchmark rate at 5.75% at its October meeting, for the fourth consecutive time. At the same meeting, the bank raised its deposit facility rate by 25 basis points to support the rupiah. This comes as the long-term bond yield rose to its highest level since October 2022. The bank’s decisions provide a local context for interest-rate moves, alongside rising U.S. Treasury yields. The latest trade-balance reading available in the official table is a surplus of 3,552.200 million dollars in August 2026.

The MSCI review is proceeding on a timeline that extends into next year. The company set April 30, 2027, as the deadline for receiving comments on the proposal. It said it will announce its decision no later than June 30, 2027. Until then, the freeze on index changes remains in place under the current announcement. The reclassification decision, when issued, will be the next milestone in the review of Indonesia’s status in MSCI indexes.