Weekly Report | June 17, 2019

Foreign Investment in Government Bonds

Last week, Indonesia Composite Bond Index (ICBI) picked up 0.81% to 255.19 as foreign investors recorded inflows of IDR4.591.9 into government bonds. The prices of Indonesian sovereign bond (SBN) slightly increased in last week’s early days despite above—than―estimated inflation rattled capital markets. Bond markets, dissimilar to capital markets, stayed solid in the first few days of last week.

The price of Indonesian sovereign bond stayed solid in last week’s mid days as global economic gloom urged the Fed and other central banks to slash 2019 rates. The World Bank also revised lower its global economic outlook from 2.9% to 2.6%. Declining forex reserves for paying government debts, coupled with global tensions between Hong Kong vs. China and the US dispute with its major trading partners lowered Indonesian sovereign bond’s prices. But the FFR seen on the track for 2019 cut drive Indonesian sovereign bond ’s prices to a higher close on Friday (06/14).

Last Week’s USDIDR

Last week, USDIDR was at a tepid close of 0.39% to 14,325. That was attributable to Indonesia’s modest economic data released by Bank Indonesia (BI). BI reported declines in May’s forex reserves from USD4 billion in April to USD120.3 billion in May. The declines were exaggerated with April’s 6.7% y-y growth in retail, well below March’s 10.1% y-y.