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Indonesian bond yields jumped to three-week highs on Wednesday as news that reformist Finance Minister Sri Mulyani Indrawati was leaving office added to investors’ anxiety over the Greek crisis.

The departure of Sri Mulyani, who will join the World Bank as managing director, raised doubts that the pace of reforms in Southeast Asia’s biggest economy could slow and pushed up yields by around 10 basis points across the curve, traders said.

“The foot might be taken off the reform accelerator so it is a significant loss to the team that is in place over there,” said Kenneth Akintewe, a bond fund manager at Aberdeen who manages $500 million in assets.

By afternoon, benchmark ten-year bond yields ID10YTRR rose 12 basis points to 8.78 percent, its highest since April 20 while 20-year bond yields rose 13 basis points to 9.98 percent.

Investors largely ignored a central bank rate decision where it left rates unchanged, as widely expected.

Investors have been big buyers of Indonesian debt in the past few months, chasing yields down to record lows last week, largely attracted by its pace of reform and liberalization and the prospect of an investment grade rating in the coming months.

Indrawati was named a managing director of the World Bank Group, a sign of the growing clout of emerging economies. But the move also reflects increasing pressure on her at home from politicians opposed to her clean-up campaign.

Jakarta-based traders said the bulk of the selling in the medium to long end of the curve was by offshore funds who have been heavy buyers in the past few weeks.

Foreign investors have bought a net 40 trillion rupiah in government bonds this year, double the net purchases of all of last year. That took their net holdings to a record Rp 148 trillion ($16.4 billion), representing 24.6 percent of all outstanding government debt.

That has driven yields down sharply this year, with 10-year bond yields plunging by more than 150 basis points to a record low of 8.50 percent last week. Since then, they are up by nearly 30 basis points.

Reuters