HIGHLIGHTS
- The yield on the 10-year Indonesia Government Bond increased to 6.816% on May 20, 2026, from 6.778% in the previous trading session. Meanwhile, the UST 10-year yield fell by 10 bps to 4.57% yesterday.
- Government bond trading volume reached IDR42.39 trillion, primarily concentrated in short-term tenors (<5 years). The volume declined compared to the previous day’s transaction value of IDR64.83 trillion and remained below the year-to-date average of IDR49.43 trillion. Meanwhile, outright transactions totaled IDR19.57 trillion, decreasing from IDR28.11 trillion recorded a day earlier.
- In the corporate bond market, total trading volume amounted to IDR8.40 trillion, also dominated by short-term maturities (<5 years). Trading activity increased significantly compared to the previous day’s volume of IDR4.56 trillion and remained above the year-to-date average of IDR3.31 trillion. Outright transactions were recorded at IDR8.35 trillion, rising from IDR4.56 trillion in the previous session.
- In the currency market, the Rupiah appreciated by 0.56% against the US Dollar to IDR17,605 from IDR17,705. Meanwhile, the Jakarta Composite Index (JCI) declined by 0.82% from 6,371 to 6,319. In the commodities market, Brent crude oil prices fell from USD111.28 to USD109.01 per barrel, while WTI Cushing Crude Oil Spot prices declined from USD107.77 to USD102.12 per barrel.
DOMESTIC UPDATES
- Bank Indonesia raised its benchmark interest rate by 50 bps to 5.25% in May 2026, exceeding market expectations of a 25 bps hike, to stabilize the rupiah and contain inflation risks amid heightened global volatility from the Middle East war. BI also reinforced its “pro-stability” policy mix through stronger FX intervention, higher SRBI yields, and tighter FX transaction rules, while keeping macroprudential and payment system policies supportive of growth. In addition, BI lowered the threshold for cash FX purchases without underlying transactions to USD25,000 starting June 2026, while expanding liquidity incentives, easing macroprudential rules, and maintaining double-digit money supply growth to support banking liquidity and credit expansion. (Bank Indonesia)
- President Prabowo outlined Indonesia’s 2027 macroeconomic and fiscal framework, targeting economic growth of 5.8%–6.5% as a step toward the 8% growth goal by 2029. The government aims to keep the fiscal deficit at 1.8%–2.4% of GDP, with state revenue targeted at 11.82%–12.40% of GDP and spending at 13.62%–14.80% of GDP. The 10-year government bond yield is projected at 6.5%–7.3%, while the rupiah is expected at Rp16,800–17,500 per US dollar. The government also targets lower poverty, unemployment, and inequality levels through prudent and sustainable fiscal policy. (MoF, Cabinet Secretariat)
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