October’s inflation rate is sloping. Based on a Bloomberg Survey, Indonesia’s headline inflation rate for the October period is projected to be only 0.09% MoM. In addition to the normalization of a number of food commodity prices, NHKSI Research sees the impact of a significant increase in subsidized fuel prices of up to 30%, which has been reflected in the September inflation rate. Headline inflation in September reached 1.17% MoM, compared to August which recorded a deflation of 0.21% MoM.

Corporate Bonds
ASRI Buyback Global Bonds USD 138.59 Million. Alam Sutera Realty Tbk. (ASRI) bought back (buyback) global bonds worth USD 138.59 million after holding a tender offer (tender offer). ASRI made faster payments for debt securities maturing in 2024. The total outstanding debt securities reached USD 171.39 million. (Bisnis Indonesia)

Domestic Issue
BI: Current Account Balance Will Still Surplus in 3Q22. Indonesia’s current account balance is expected to record another surplus in 3Q22. The trade balance surplus will support the current account surplus. In 2Q22, Indonesia’s current account balance recorded a surplus of USD 3.9 billion or 1.1% of gross domestic product (GDP). Additionally, the potential current account surplus was also driven by the goods trade balance surplus. (Kontan)

The Strong Dollar put pressure on the 4Q22 GDP. The U.S. economy re-expanded with Annualized 3Q22 GDP QoQ grow +2.6% (Vs. contractions of -0.6% 2Q22 and -1.6% 1Q22), driven by export growth. The GDP growth which exceeds market expectations has the opportunity to make the Fed Ultra Hawkish to reduce the inflation pace. Moreover, the strength of Strong Dollar sentiment amid the DXY, which stayed at its high level in 4Q22, potentially hampering exports and slowing down the U.S. GDP, followed by a recession in 2023.

Download full report HERE.