The government did not win the FR93, book yield requests between 7.50%-7.70%. The yield expectation is higher than the previous SUN auction last June 7, between 7.20%- 7.43%. The wait-and-see attitude of investors ahead of the BI RDG results, and the depreciation of the rupiah, colored the demand for SUN auction yields this time. Based on the survey, BI is projected to hold the BI 7DRRR in June at the level of 3.50%; with the rupiah depreciating to the level of IDR 14,800/USD. Overall, the government managed to win IDR 18.8 trillion or below the indicative target of IDR 20 trillion.

Corporate Bonds
AGRO: Pay off IDR239 Billion Bonds. PT Bank Raya Indonesia Tbk (AGRO) has prepared IDR239 billion in funds. The funds are prepared to pay off debt securities maturing on July 7, 2022. Meanwhile, the repayment is in the form of BRI Agro Bonds I 2017 series B which has a principal value of IDR239 billion. (Emiten News)

Domestic Issue
SUN Auction Below Target. The results of the auction of Government Securities (SUN) on Tuesday (7/6) resulted in a bid of IDR 35.06 trillion. The number of bids for today’s auction is lower than the previous auction, where at the June 7 SUN auction, the government collected bids of IDR 43.54 trillion. Based on data from the website of the Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance, SUN series FR0091 received the highest offer from investors of IDR 17.87 trillion. (Bisnis Indonesia)

Domestic Liquidity Normalization. The rupiah was maintained at the level of IDR14,800/USD, and the movement of the benchmark SUN occurred amid market focus on monetary policy. BI is projected to prefer liquidity normalization through a gradual increase in the Statutory Reserves, compared to the BI 7DRRR hike for the June period. Meanwhile, strengthening SUN before the end of the government’s front loading strategy for the 1H22 period.

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