Last Thursday, the results of the Bank Indonesia (BI) Board of Governors (RDG) Meeting for the November 2020 period decided to lower the BI 7 Day Reverse Repo Rate (BI 7-DRRR) by 25 bps to 3.75%. This is beyond market expectations, which according to a Bloomberg survey remains at the 4% level. This means that the BI 7-DRRR is now at its lowest position since its introduction in August 2016 replacing the BI Rate. BI also lowered the Deposit Facility rate to 3% and the Lending Facility rate now at 4.5%. Meanwhile, this decision takes into account the predicted low inflation, maintained external stability and measures for national economic recovery. In the same week, obligaist market players also responded positively to the Indonesian Balance of Payments (BOP) in 3Q20 to a surplus of USD 2.1 billion, continuing to achieve a surplus of USD 9.2 billion in the previous quarter. The continuing balance of payments surplus is supported by surpluses from the current account as well as the capital and financial account. At the close of last Friday, the yield on the benchmark series Government Securities (SUN) FR0082 closed at 6.19% and FR0083 remained at the psychological level of 7%.
Download full report HERE.