Robert Pakpahan, head of the Debt Office within Indonesia's Finance Ministry, said front loading of 61 percent of the government's full-year bond issuance target in 2016 is high but lower than front loading in 2015 (at 63 percent).

Schneider Siahaan, Director of Debt Portfolio and Strategy within Indonesia's Finance Ministry, said the center of focus remains looming monetary tightening in the USA. After the first rate hike (possibly) in December 2015, the Federal Reserve is expected to gradually tighten its monetary regime further in 2016 and 2017. Gradually rising interest rates in the USA would imply that the riskier emerging market assets become increasingly less appealing in the course of next year.

Internally, however, sentiments have improved in Indonesia due to the stable rupiah rate, controlled inflation and an expected increase in Indonesia's economic growth in 2016. This should boost demand for Indonesian assets. However, China's economic slowdown and persistent low commodity prices remain a drag for Indonesia.

Siahaan said the IDR 532.4 trillion of total government bonds planned for 2016 consist of IDR 402.4 trillion of rupiah-denominated bonds, while the remainder (about IDR 130 trillion) are US dollar-denominated, yen-denominated (samurai bonds), and euro-denominated bonds. Sharia bonds, which comply with Islamic principles, account for about 24 percent of the total IDR 432.4 trillion worth of bonds.

The Indonesian government also repeatedly emphasized that it aims to reduce the high degree of foreign ownership of government bonds. Currently, foreign investors hold 37 percent of total bonds, a figure that makes the country more vulnerable to capital outflows amid global economic shocks.