Foreign Investment on the Indonesian Government Bonds
Last week’s IDR3.745 trillion worth of net sell outflowed from the Indonesian government bonds. That left the Indonesian Composite Bond Index (ICBI) sluggish by 0.33% to 250.32. The downward occurred since April 22nd. The escalating trade battles between the US and China upset the Indonesian’s government bonds markets. Indonesian government bonds hit hardest on Thursday (05/09) as BI’s market operation, cushioning a flood of outflows—foreign outflows particularly—from bond markets eased investors’ jitters. However, the corrections got stepper when BI announced 1Q19 widening current account deficits of US$6.96 billion or equal to 2.6% of GDP. 1Q19 deficits were much worst than 1Q18 deficits of US$5.19 billion or 2.01% of GDP.
At the auction of SBN dated (05/07), the Indonesian authorities secured the proceeds of IDR23.40 trillion from the total incoming bid of IDR32.96 trillion. The funds absorbed were bigger than the indicative target of IDR15 trillion. SBN with 10–year tenor, FR0078, obtained IDR8.34 trillion worth of the biggest bid.
Review of Last Week’s USDIDR
USDIDR was at a lower close of 0.43% to 14,327 as rupiah was depreciated. 1Q19 GDP reading and April’s forex reserves, falling short estimate and less conducive backdrop slashed foreign inflows and left rupiah depreciation. Additionally, 1Q19 current account deficits, lower than 4Q18 failed to bring rupiah appreciation.
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