Investors avoid short tenors, FR0090 records 13 bps yield increase. Over the weekend, all benchmark government securities recorded an increase in yields, amidst the wait for the results of the BI RDG this week. Meanwhile, Indonesia’s exports in June reached USD 26.1 Billion (+21.3% MoM), supported by high CPO exports; while Indonesia’s imports are valued at USD 21 Billion (+12.9% MoM). NHKSI Research sees this trade balance surplus as having a positive impact on GDP growth in 2Q22. Meanwhile, the sloping price of CPO commodities amid a potential global recession, impacting Indonesia’s CPO dominated exports, and has the opportunity to reduce the trade balance surplus.

Corporate Bonds
Total Bonds and Sukuk Emissions Throughout 2022 So IDR 80.18 Trillion. The Indonesia Stock Exchange (IDX) recorded that the total issuance of bonds and Sukuk that had been recorded throughout 2022 was 67 emissions from 52 issuers worth IDR 80.18 trillion. Meanwhile, the total issuance of Bonds and Sukuk listed on the IDX amounted to 496 issuances with an outstanding nominal value of IDR 441.73 trillion and USD 47.5 million, issued by 121 Issuers. This figure increased in line with the IDX’s arrival of six bonds and one sukuk during the week. (Investor Daily)

Domestic Issue
Trade Balance Soars Thanks to CPO Exports. The Central Statistics Agency (BPS) noted that the goods trade balance surplus in the month under review was USD 5.09 billion, higher than the surplus in May 2022 which amounted to USD 2.89 billion. The trade balance surplus in June 2022 was supported by crude palm oil (CPO). The reason is, in June 2022, the government again opened the tap for exports of CPO and its derivatives. For the record, the CPO surplus was recorded at USD 2.74 billion, or contributed 54% to the surplus in the goods trade balance in June 2022. (Kontan)

Even if BI 7DRRR goes up, it is to maintain rupiah and capital outflow, not reduce inflation. Unlike the case with Hawkish’s aggressive FFR which was done to reduce US Headline inflation which reached 9.1% YoY. In fact, the rupiah exchange rate was stable and depreciated around the level of IDR15,000/USD this July, with capital outflows still under control. Meanwhile, Indonesia’s low core inflation in June at 2.63% YoY, below the median rate of BI’s annual target of 2%-4%, leading some to project that the result of this Thursday’s RDG is BI will maintain the BI 7DRRR at the level of 3.50%.

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