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Inflation risks reinforce BI's hawkish stance

However, the upside pressure should be partly offset by easing prices of several key food commodities, with chicken, eggs, and cayenne pepper declining by 11.5% YTD, 10.8% YTD, and 11.0% YTD, respectively. Looking ahead, inflation risks remain tilted to the upside as BMKG projects El Niño to peak in Aug 26 with an index of 1.6—the same level recorded in Mar 24, when volatile food inflation surged to 10.4% YoY. In our view, the elevated inflation outlook reinforces BI's cautious policy stance and keeps the door open for further policy tightening should inflationary pressures and Rupiah volatility intensify.

Fixed Income Daily UpdateJessica Tasijawa
DownloadJul 01, 2026

Liquidity support improves market conditions

The move aimed to highlighted government's commitment to preserving adequate liquidity amid still strong credit demand, with bank lending growing 11.5% YoY as of May 26. In our view, the decision underscores increasingly close fiscal monetary coordination to support credit intermediation, maintain financial system liquidity, and complement BI's broader stabilization efforts, while ensuring sufficient funding capacity for continued economic expansion without undermining Rupiah stability.

Fixed Income Daily UpdateJessica Tasijawa
DownloadJun 30, 2026

Bach Multi Global (BACH IJ/Not rated) - TOWR’s Captive Power & Site-Service Arm Goes Public

BACH is an integrated provider of power generation equipment and telecom infrastructure services with 25+ years of history, spanning diesel genset sale and rental (backup and prime power for tower sites and data centers), telecom infrastructure construction, and ongoing O&M. It sits in the picks and shovels layer of Indonesia's network build out, soon to become TOWR's captive power and site services arm.

Daily ReportDaniel Widjaja
DownloadJun 29, 2026

Stabilization efforts continue amid lingering global uncertainty

While the latest escalation has increased geopolitical uncertainty, commercial shipping through the Strait of Hormuz continues and oil prices have continued to ease as tanker traffic gradually normalizes, suggesting that supply disruption risks remain contained for now. In our view, the recent developments highlight that geopolitical risks remain highly fluid, leaving global markets vulnerable to renewed volatility should negotiations fail to resume. As such, safe haven demand for the U.S. Dollar is likely to remain elevated, while emerging market assets, including Indonesia, may continue to face intermittent pressure until a more durable ceasefire and broader agreement are reached.

Fixed Income Daily UpdateJessica Tasijawa
DownloadJun 29, 2026

Higher-for-longer as stability and inflation risks build

Despite tighter financial conditions, U.S. economic activity remained resilient, with personal consumption and personal income both rising by 0.7% MoM and 1Q26 GDP growth revised upward to 2.1% annualized, suggesting domestic demand continues to support economic momentum. The combination of persistent inflation and resilient growth reinforces the higher for longer interest rate narrative and increases the likelihood of another Fed rate hike as early as Sep 26. The stronger macro backdrop is likely to keep the DXY well supported and UST yields elevated, maintaining pressure on emerging market assets and reinforcing the need for BI to preserve competitive domestic yields to sustain portfolio inflows and Rupiah stability.

Fixed Income Daily UpdateJessica Tasijawa
DownloadJun 26, 2026