SBNs Domination over Capital Inflows Proportion

Bank Indonesia (BI) recorded Indonesia’s Dec. official reserve assets of USD129.2 billion or the second-highest figure after Jan’s 2018 figure of USD131.9 billion. Dec’s soaring number was contributed by capital inflows of IDR224.2 trillion the first-largest proportion of which was worth IDR168.6 trillion contributed by government securities (SBNs). The second-largest contributor was equities to make up USD50 trillion, while the corporate bonds and BI promissory notes (SBIs) accounting for respectively IDR3 trillion and IDR2.6 trillion to the total proportion. Dec’s pick up made up the 2019 total official reserve assets to increase by USD8.53 billion to leave Dec’s figure higher than that of USD120.7 billion per Dec. 2018. Dec’ rising data attributed to oil & gas foreign exchange receipts, withdrawal of government foreign loans, and other foreign exchange receipts.


Yields Spread between 10-Year Tenor SBNs and 10-Year Tenor UST

Surging capital inflows into SBNs showed investors’ responses to highly volatile equities and corporate bonds to generate higher-investment returns than that of SBI’s returns as investors retained wait-and-see stance to anticipate the mutual trades, marked by the signing of the US-China first phase trade deal on the mid of Jan’s 2020. Besides, yields of government bonds (SUNs) caused spread between Indonesian sovereign bonds with 10-year tenor and US treasury (UST) with 10-year tenor to equally fall short in the range of 512-540 Bps. Indonesian SBNs spread was much wider than that of Malaysia’s 138-166 Bps and Philippine’s 243-293 Bps in December 2019.

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