HIGHLIGHTS
- The yield on 10-year Indonesian Government Bonds stood at 6.570% on July 16, 2025, slightly lower than 6.574% recorded in the previous session. Meanwhile, UST 10yr yield declined by 4 bps to 4.46% yesterday.
- Government bond trading volume reached IDR67.24 trillion, primarily driven by short-term tenors (< 5 years). This marked an increase from IDR54.02 trillion in the prior session and exceeded the year-to-date (YTD) average of IDR50.06 trillion. However, outright transactions fell to IDR36.51 trillion from IDR41.22 trillion the previous day.
- Corporate bond volume totaled IDR3.36 trillion, also dominated by short-term tenors (< 5 years). Although lower than the previous day's volume of IDR4.33 trillion, it remained above the YTD average of IDR3.18 trillion. Outright transactions also declined to IDR3.34 trillion, down from IDR4.33 trillion in the prior session.
- The Indonesian Rupiah weakened by 0.11% against the US Dollar, closing at IDR16,278 compared to IDR16,260 previously. Meanwhile, the Jakarta Composite Index (JCI) rose 0.72% from 7,140 to 7,192. On the commodity front, Brent crude declined to USD71.21 per barrel from USD71.36, while WTI Cushing crude fell to USD66.52 per barrel from USD66.98.
DOMESTIC UPDATES
- Bank Indonesia cut the BI Rate by 25 bps to 5.25%, citing low inflation, a stable Rupiah, and the need to support growth as loan expansion slowed to a two-year low of 7.77% y-y. Despite ample liquidity, banks remain cautious, parking funds in SBN and SRBI, prompting BI to push yields lower to encourage lending. With dovish guidance, clearer US tariff direction, and stronger fiscal spending, we now see room for four rate cuts in 2025, totaling 100 bps. (BI, BRIDS)
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