Indonesia Macro Update - Inflation 05 May 2026
KBVS MACRO UPDATE
Tuesday, 5 May 2026
Soft April inflation lifts SUN10Y real yield to a 413 bps spread
Indonesia’s headline inflation came in at 0.13% MoM or 2.42% YoY in Apr '26. This easing was primarily driven by falling prices in the Personal Care and Other Services category, which dropped sharply by -0.99% MoM. These price drops acted as a cushion against rising travel costs.
Looking at the bigger picture, global commodity markets are giving mixed signals. While a recent drop in gold prices offered some relief to consumers, global crude oil prices remain stubbornly high due to ongoing geopolitical conflicts.
From an external perspective, the Indonesian Rupiah has recently traded in the range of around IDR17,200–17,400/USD, reflecting a continued depreciation from earlier levels below IDR17,000. For retail investors, the key metric to watch is how companies handle these rising input costs. We anticipate BI will keep its benchmark interest rate steady in the near term, as this approach helps protect the Rupiah, manage imported inflation risks, and maintain the attractive 413 bps real yield to sustain foreign investor interest in domestic bonds.
Regards,
Fikri C Permana, Khairunnisa N S - KBVS Research Team