Strengthening SUN as Front Loading Strategy Ends. All benchmark SUNs strengthened, with FR0093 leading the decline in yields by 13 bps to 7.38%. This strengthening is approaching the end of the government’s front loading strategy, namely the government’s aggressive stance in offering SBN auctions for the first six months of each year. Yesterday’s SUN market movement, amid the rupiah being maintained around the level of IDR14,800/USD, and the market’s focus on monetary policy.

Corporate Bonds
BBRI Releases Environmentally Based Bonds. PT Bank Rakyat Indonesia (Persero) Tbk (BBRI) plans to release Sustainable Environment-Based Bonds I Phase I Worth IDR 5 Trillion. The bonds will be issued in three series, namely Series A, Series B, and Series C. The interest on the first environmentally friendly bonds will be paid on October 20, 2022. Meanwhile, the interest on the last environmentally friendly bonds and the maturity date of the environmentally friendly bonds will be paid on July 30, 2023. for Series A Environmental Bonds. Then on July 20, 2025 for Series B Environmental Bonds and on July 20, 2027 for Environmental Bonds Series C. (Kontan)

Domestic Issue
BI: Inflation in Indonesia at 4.2%. In the midst of global uncertainty, inflationary conditions also soared in various countries. Bank Indonesia (BI) also admitted that there is a potential for Indonesia’s inflation in 2022 to increase and exceed the upper limit of the set target range. The inflation target range set by both the government and BI is 2% YoY to 4% YoY this year. With the current conditions, BI Governor Perry Warjiyo also estimates that inflation will be at 4.2% YoY. (Kontan)

BI 7DRRR remains at 3.50% until there is inflationary pressure. BI revised up its inflation ceiling target to 4.2% YoY (Vs. Prev. 4% YoY). Currently, inflation in May is at 3.55% YoY (2.58% MoM), better than other countries, making the BI 7DRRR in June projected to remain at 3.50%. On the other hand, BI has the potential to continue its liquidity normalization policy by increasing the Statutory Reserves in July and September to 7% and 9%, respectively.

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