Indon Sov Debt Curve Steeper, BI To Hold Rates at 6% for Some Time

Indonesian USD Sovereign Debt curves are steeper on Tuesday with yields -2 to +2bps across the curve, while US Treasury Yields are unchanged. Indonesia's likely next president Prabowo Subianto said at a Forum that he is determined to maintain the government’s current trajectory of fiscal prudence and wise management.

• The 2Y is -1.1bps lower at 4.88%, 10Y is +1.4bps higher at 5.02%, while 5yr CDS is up 0.5bp to 70bps
• The spread difference between USD Indon & US Treasury yields has been closing in the front end as 2Y now 29bps from 38bps a month ago, while the 10Y is now 80.5bps moving 4bps wider over the past month
• Cross market moves, the USD/IDR is 0.06% higher, the JCI is 0.12% lower, whilst US Tsys yields are unchanged
• Bank Of Indonesia Governor Perry Warjiyo, says the bank will maintain it's policy rate at 6% "for some time" and could consider easing in 2h. BI remains watchful of rupiah amid global volatility, pledges to keep inflation within 1.5%-3.5% target, while headline inflation is seen at 2.8% in 2024, falling to 2.6% in 2025