Fixed Income Update 26 Sep 2024
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 26 September 2024
Where Do We Currently Stand?
- Are We In The Recovery Phase Or The Contraction Phase?
The Fed is expected to continue its aggressive rate cuts in November. This is anticipated to stimulate global economic growth, alongside the large-scale stimulus initiated by the People’s Bank of China (PBoC). On the other hand, the hawkish stance demonstrated by the Bank of Japan (BoJ) and rising geopolitical tensions in the Middle East could pose challenges to further global economic growth.
Domestically, the continued rate cuts by the Fed are also expected to be mirrored by Bank Indonesia (BI), with a reduction in the BI Rate at a similar level. This has been reflected in declining yields, increased capital inflows into the domestic market, and continued appreciation of the Rupiah. Additionally, adjustments to the revenue and expenditure in the 2025 APBN are expected to keep the fiscal deficit for 2025 at IDR616.2 tn, equivalent to 2.53% of GDP.
Regards,
Fikri C Permana - KBVS Research