The Federal Reserve (The Fed) will continue to channel liquidity to financial markets until the US economy recovers. This commitment comes after taking into account the short-term risks to the economy and expectations of a coronavirus vaccine. Government Securities (SUN) prices closed higher, with 30-year yields hitting their lowest levels in 7 years. Yield FR0076 fell to leave the psychological level of 7%, or closed at the level of 6.89%. This figure is the lowest level in mid-2013. Previously, the US congress approached a decision on Covid-19 assistance of USD 900 billion. This aid package includes a stimulus of USD 600 billion – USD 700 billion and an extension of unemployment assistance.
2021 Corporate Bonds Maturity Translucent IDR 121 Trillion. Based on data from the Indonesian Central Securities Depository (KSEI) processed by Pefindo, the value of bonds maturing in 2021 will be the largest in 3Q21, reaching IDR 38.1 trillion. Then the second largest was in 2Q21, namely IDR 31.7 trillion, then in 4Q21 it was IDR 29.6 trillion. Meanwhile for 1Q21 the smallest is IDR 22.5 trillion. (Bisnis Indonesia)
BI Keeps Reference Interest Rate at 3.75%. Bank Indonesia (BI) decided to maintain the benchmark interest rate at the level of 3.75% at the BI Board of Governors Meeting in December 2020. In addition to holding back the benchmark interest rate, the central bank also maintained the deposit facility rate at 3% and the lending facility rate at 4. 5%. This decision is consistent with the predicted low inflation and maintained external stability to support the national economic recovery. (Kontan)
30-year SUN Yield Below 7%. Investors can again pay attention to long tenors. Yesterday, the 30-year SUN posted a yield of 6.89 percent, or the yield on government bonds fell 15.2 bps. This yield is now lower than the 25-year tenor SUN which is currently around 7%. This indicates that investors are again interested in long-term SUN with high yields, due to the increasingly minimal long-term risk. This strengthening occurred amid positive sentiment regarding the Fed’s benchmark interest rate, which remained at the 0% to 0.25% level. Meanwhile, Bank Indonesia’s benchmark interest rate was also held at the level of 3.75%.