Citi's latest report on ASEAN bond demand highlights a significant shift towards local currency bonds in Indonesia, Thailand, and Malaysia, reducing reliance on foreign investors. In Indonesia, banks, Bank Indonesia, and insurance funds are expected to be the primary buyers of government bonds, with banks projected to purchase IDR 166 trillion in 2025. This shift is attributed to potential policy rate cuts and a move away from OMO instruments. Similarly, Thailand's financial corporations, particularly life insurers and mutual funds, are anticipated to maintain their stronghold on government bonds, with a stable allocation expected despite muted local business sentiment. In Malaysia, the Employees Provident Fund (EPF) and banks are set to increase their holdings of Malaysian Government Securities (MGS) and Government Investment Issues (GII), with EPF's holdings projected to reach MYR 355 billion. Citi notes that foreign ownership of Malaysian bonds has remained stable since pre-COVID levels, with a forecasted MYR 22 billion in net foreign purchases needed to fill the supply gap in 2025. Overall, Citi's analysis underscores a robust domestic demand for ASEAN bonds, suggesting a reduced dependency on foreign inflows.