ASIATODAY.ID, JAKARTA — Indonesia has launched an electronic repurchase agreement (repo) trading platform backed by sovereign Islamic bonds, a move aimed at boosting liquidity in the country’s Sharia-compliant debt market and strengthening its position as a leading global Islamic finance hub.
The Indonesia Stock Exchange (IDX) on Monday introduced repo transactions using Surat Berharga Syariah Negara (SBSN), or sovereign sukuk, through its Alternative Market Organizer System (SPPA). Developed in collaboration with the Ministry of Finance, the new platform is expected to deepen Indonesia’s bond and money markets by providing a more efficient, transparent, and integrated trading infrastructure.
The initiative addresses one of the weakest segments of Indonesia’s fixed-income market. In 2025, interdealer repo transactions backed by sovereign sukuk totaled less than IDR1 trillion, compared with more than IDR2,500 trillion in repo transactions involving conventional government bonds, highlighting substantial room for market expansion.
The new facility enables commercial banks, regional development banks, and institutional investors to use sovereign sukuk as collateral for short-term funding, liquidity management, and portfolio financing, broadening financing options while encouraging greater secondary-market activity.
“The availability of an integrated, transparent, and efficient trading platform is expected to increase sovereign sukuk repo transactions and improve liquidity in the secondary market,” IDX Business Development Director Iding Pardi said.
The launch further expands SPPA’s role as Indonesia’s electronic trading infrastructure for debt securities and money market instruments. The platform already supports conventional government bond repo transactions and serves as the country’s quotation platform for money and foreign exchange markets.
Under the new framework, repo transactions involving sovereign sukuk between conventional financial institutions can be executed under the internationally recognized Global Master Repurchase Agreement (GMRA).
Indonesia’s National Sharia Council (DSN-MUI) has clarified that separate Sharia contracts are not required for such transactions unless Islamic financial institutions participate, providing greater legal certainty and operational flexibility.
A more active repo market is expected to improve price discovery, facilitate liquidity distribution across the financial system, and increase trading volumes in the underlying securities. These improvements are expected to enhance the efficiency of Indonesia’s sovereign sukuk market while supporting broader financial market development.
IDX said it will continue working with regulators, financial authorities, and market participants to expand SPPA’s capabilities and strengthen Indonesia’s financial market infrastructure. The exchange aims to create a more transparent, efficient, and competitive marketplace that supports long-term capital market growth.
The launch represents another step in Indonesia’s strategy to expand its Islamic finance ecosystem, improve domestic market resilience, and position its sovereign sukuk market as a more liquid and internationally competitive asset class as global demand for Sharia-compliant financial instruments continues to grow. (AT Network)
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