HIGHLIGHTS
- Yield of 10-year Indonesia Government Bonds is 7.057% on April 24, 2024, vs 7.057% the day before. Meanwhile, at the same time, the10-year UST yield rose to 4.65%, from 4.61% the day before.
- Government bonds volume was IDR47.12 trillion, and it was dominated by short term (< 5 years). It was dropped than the previous day transaction of IDR48.13 trillion. The volume higher than its YTD average of IDR44.83 trillion. While the outright transaction reached IDR16.97 trilion increased from the previous day's transaction which amount to IDR11.86 trilion.
- Meanwhile, the total volume of corporate bonds was recorded at IDR2,293.71 billion, dominated by short term (< 5 years). The transaction volume fell compared to the previous day's volume of IDR2,639.29 billion. The volume higher compared to this year's average of IDR1,982.85 billion. Meanwhile, outright transaction recorded at IDR1,866.31 billion fell from the previous day's transaction of IDR2,511.29 billion.
- The Rupiah exchange rate against the US Dollar strengthened by 0.41% to IDR16,154 from IDR16,220 while the JCI was up 0.90% from 7,111 to 7,175. Then Brent advanced from 87.49 to 88.55 USD per barrel, while WTI Cushing Crude Oil Spot price was up from 82.85 to 84.66 USD per barrel.
DOMESTIC UPDATES
- Bank Indonesia (BI) has decided to increase the BI Rate by 25 basis points to 6.25%, citing pressure on the IDR and rising global uncertainties. Such move deviates from our/consensus base case of no rate change, although calls for rate hikes were already increasing, especially with the absence of monetary contraction in recent weeks. The aim is to proactively address potential risks, such as a delayed or no rate cut by the Fed in 2024 and heightened tensions in the Middle East. (Bank Indonesia)
In our assessment, BI's window to lower the BI Rate in 2024 is narrowing, given their baseline scenario indicating only one rate cut by the Fed in December 2024. Faster rate cuts are unlikely, as they could undermine IDR stabilization due to lower yields and rate spreads.
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