SUN Benchmark weakened to a limited extent, amid the less effective BI 7DRRR level of 4.25%. Yesterday, the rupiah exchange rate touched IDR13,385/USD before finally closing at IDR15,357/USD. Strong Dollar again depresses the rupiah exchange rate, with DXY holding on to a high level of 113, responded negatively by investors.
Corporate Bonds
MEDC: Bond Buyback USD 250 Million. PT Medco Energi Internasional Tbk (MEDC) will repurchase a tender offer worth USD 250 million or around IDR 3.83 trillion. The adjustment of the first debt amount is based on USD 500 million, 6.75% prior debt security‘s due date in 2025. Followed by USD 650 million, 7.37% prior debt security is due 2026, and USD 650 million, 7.375% prior debt security is due 2027. (Emiten News)
Domestic Issue
Domestic Spending Potential Reach IDR 700 Trillion. The potential for country and regional expenditure (APBN-APBD) that can be utilized to buy domestic products reach over IDR 700 trillion. Such potential funds came from goods, capital, and social assistance expenditures. Moreover, the fiscal incentives provided by the government include import duty facilities, tax allowances, tax holidays, and regional incentives. (Investor Daily)
Recommendation
Hawkish yet Dovish. Not as high as +50Bps, but not as low as +25Bps, the increase in the BI 7DRRR is projected to be +38Bps. According to a Bloomberg survey, BI is projected to raise the BI 7DRRR Oct. to a level of 4.63% (Vs. Sept. 4.25%). NHKSI Research sees the increase in subsidized fuel prices last September will still have an impact on inflation during October. However, inflation is likely to be suppressed by deflation from the foods, beverages, and tobacco categories.
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