Resilient Consumers keep inflation high. The accumulation of savings during the Covid19 pandemic, and rising wages amid a solid labor market, helped people cope with high inflation and Borrowing Costs. Data showed that Retail Sales Advance AS Oct. MoM grew 1.3% (Vs. Sept. 0.0%), indicating consumer spending increased at the beginning of 4Q22. A Resilient Consumer has a chance to keep the Fed on a Hawkish path at the upcoming Dec. FOMC. Additionally, high FFR has slowed down industrial production activity again, with US Industrial Production in Oct. MoM at -0.1% (Vs. Sept. 0.1%).
Corporate Bonds
Moratelindo Ready to Pay Off Bonds Amounting To Rp 460 Billion. PT Mora Telematika Indonesia (MORA) or Moratelindo, a telecommunications infrastructure services company, plans to pay off its 2017 Series B Bonds I Moratelindo of IDR 460 billion. The repayment of the bonds will mature on December 5, 2022. (Beritasatu)
Domestic Issue
Indonesia’s Imports Begin to Slow Down. The slowdown in imports is feared could disrupt manufacturing performance in Indonesia. In line with imports in October which slowed down from the previous month. Data from The Statistics Indonesia recorded that the value of imports in October was USD19.14 billion, down 3.40% compared to September 2022. In this period, only the consumption imports increased, while raw materials/auxiliaries and capital goods decreased. (Kontan)
Recommendation
The survey result is balanced and BI is projected to raise the BI 7DRR Nov. by 25Bps or 50Bps. The increase in BI 7DRR 50Bps, or Front Loading, signaled that BI’s stance remains Hawkish to restrain rupiah depreciation. On the other hand, Trade Balance Surplus in Oct. rose significantly to +USD5.6 billion (Vs. Sept. +USD4.9 billion), leaving room for BI to maintain Rupiah volatility and make BI raise the BI 7DRR by 25Bps only.
Download full report HERE.
