July Inflation has the potential to decline. The BI survey for the first week of July 2022 stated that CPI Headline MoM inflation in July 2022 was projected at 0.40% (Vs. Jun. 0.61%), in line with the decline in prices of a number of commodities such as cooking oil deflation -0.04% MoM. This survey is in the midst of speculation that BI will not necessarily increase the BI 7DRRR this July, in line with the CPI Core YoY Jun. 2.63%, still below the median value of BI’s annual target of 2%-4%. For the record, the result of the BI RDG will be posted on July 21, or a week earlier than the FOMC Rate Decision on July 28 which is projected to raise the FFR by 75 bps.

Corporate Bonds
Three Bonds and Two Sukuk Listed This Week. During 4-8 July 2022, three bonds and two new sukuk were listed on the Indonesia Stock Exchange (IDX). First, Global Mediacom’s Shelf Registered Bond III Phase I Year with a principal value of IDR 700 billion. Second, the Global Mediacom Phase I Sustainable Sukuk Ijarah III 2022 with a principal amount of IDR 500 billion. Third, the Shelf Registration Bond II Bussan Auto Finance Phase I Year 2022 with a nominal value of IDR 100 billion. Fourth, SMART Phase I 2022 Shelf-Registered Bonds with a principal value of IDR 1.5 trillion. Fifth, Sustainable Sukuk Mudharabah I Mandala Multifinance Phase II 2022 with a principal amount of IDR 650 billion. (Kontan)

Domestic Issue
New Energy and Renewable Energy Bill. The new energy and renewable energy bill (RUU) will go through stages of level I and level II talks after the government appoints a representative ministry to discuss the bill together with DPR RI and finish compiling an inventory of problems (DIM). The New Energy and Renewable Energy Bill is a Commission VII initiative bill. This bill was approved as a bill proposed by the DPR RI in the plenary session of the DPR on June 14, 2022. (Kontan)

LCS offsets USD risk exposure. The rupiah was stable at the psychological level of IDR15,000/USD for a week, amid BI’s efforts to accelerate the use of Bilateral LCS. This week, investors will observe the release of US inflation data for June which is projected to remain high, even after the 75 bps increase in FFR. The survey projects consumer-level inflation, the US CPI, to rise to 1.1% MoM (Vs. May 1.0% MoM), and 8.8% YoY (Vs. May. 8.6% YoY). Inflation surveys remain high on the producer side as well, with US June PPI at 0.8% MoM (Vs. May 0.8% MoM) and 10.4% YoY (Vs. May 10.8% YoY).

Download full report HERE.