Bank Indonesia is accelerating BPPU 2030 to deepen money and FX markets, shifting emphasis from building infrastructure to increasing actual trading, participation and price formation.

Tools such as INDONIA, Overnight Index Swaps, the VASTRA hedging scheme and expanded local-currency settlement aim to reduce shock amplification and give foreign investors reasons to stay.

Success will be measured by transaction data and sustained liquidity under stress, so that Bank Indonesia needs to intervene less forcefully in the next bout of global volatility.

Picture a pension fund manager in London holding Indonesian government bonds. The rupiah starts sliding during the European afternoon, but by then Jakarta’s trading desks have long gone home. Until recently, her options were limited: sit tight and swallow the loss, or sell the bonds and leave. In a crisis, plenty of investors pick the second option, and they tend to pick it all at once.

That small, unglamorous problem of time zones sits closer to the heart of emerging-market fragility than most policy debates admit. On October 23, Bank Indonesia (BI) met with the Indonesian Money Market and Foreign Exchange Market Association (APUVINDO), with the Financial Services Authority (OJK) also involved, to accelerate implementation of the Blueprint for Money Market and Foreign Exchange Market Deepening 2030 (BPPU 2030). 

In a press release issued on October 27, BI outlined the meeting’s central message: market deepening must be measured not merely by the availability of rules and infrastructure, but by increased transaction activity, broader participation, better price formation, and stronger governance. Governor Destry Damayanti made the distinction explicit. The task now is to move from building the foundations to ensuring that market participants actually use them.

Yet meetings like this usually end up as a footnote, while the headlines go to the BI-Rate. That’s a mistake. Interest rates set the direction of policy; market depth decides whether that policy arrives anywhere. A country with shallow markets is like a car with worn-out shock absorbers. Every pothole on the global road goes straight into the cabin.

Shallow Markets: Where Small Bumps Become Big Shocks

The pattern is familiar to anyone who lived through the taper tantrum of 2013 or the dollar surge of 2022. When global risk appetite flips, foreign investors head for the exit. If the domestic market is thin, there aren’t enough buyers........

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