In May’25, US S&P Global Composite PMI rose to 52.1 (prev: 50.6). While price spiked by the most since Aug’22, better figures were seen in business confidence and output, thanks to tariff hike pause. From domestic, last quarter, Indonesia’s CA deficit improved to -USD177mn or -0.05% of GDP (TRIM: +USD1.47bn, cons: -USD132mn, prev: -USD1.1bn). Imports dropped by -12.2% q-q to -USD52.3bn. Softening economic activities shall support our CAB structure. On international affairs, MoF and Ministry of Investment & Downstream Industries met Bank of China, covering various topics: access to China’s capital markets, bilateral ties, etc. On external borrowing, MoF converted 27 govt. borrowings, eq. to USD3.3bn denominated in JPY and USD, to IDR.
From the bond market, FR 40, 84, 86, and 76, are currently the cheapest based on our yield curve model. Last national business day, the dollar index was closed at 99.96 (+0.4%). Rupiah was appreciated by 0.4% at USDIDR at 16,330. The UST yield was down by -7.0bps to 4.53% and 10yr INDOGBR was up by +1.7bps to 6.85% – the spread between the two was at 232bps.
Economy: In 1Q25, CA deficit improved to –USD177mn or -0.05% of GDP (TRIM: +USD1.47bn, cons: -USD132mn, prev: -USD1.1bn)
The drivers were deeper contraction in imports than exports. Imports dropped by -12.2% q-q to -USD52.3bn, and exports declined by -7.8% q-q to USD65.4bn. Furthermore, Capital & Financial Account hit deficit of -USD0.3bn (prev: +USD9.7bn), so 1Q25 BoP was at -USD0.8bn (prev: +7.9bn). Direct investment moderated to +USD2.6bn (prev: +USD3.2bn). Source: Bank Indonesia
Economy: Indonesia’s MoF met Bank of China
Indonesia’s Vice Minister of Finance Thomas Djiwandono, Vice Minister of Investment and Downstream Industry Todotua Pasaribu met Bank of China’s Chairman Ge Haijiao at the bank’s head office. Topics covered were varied, ranging from bilateral ties to economic developments. There were also discussions on RMB internationalization and access to China’s capital markets. Source: Bank of China
Economy: Indonesia’s borrowings from ADB were converted to IDR
ADB and Indonesia’s MoF successfully converted 27 govt. borrowings, eq. to USD3.3bn denominated in USD and JPY, to IDR. The initiative marked the first of such conversions in big scale across Asia Pacific. It also signaled ADB’s commitment to Indonesia’s financial stability and innovation. Vice Minister II of Finance—Thomas Djiwandono—said that the policy would lower our financing costs, ultimately freeing up some fiscal spaces. Source: Kontan
