Fixed Income Update 09 Jul 2026
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 9 July 2026
Global Uncertainty Keeps Indonesia on Guard
Global sentiment turned more cautious after the U.S. revoked Iran's oil export license, reigniting geopolitical risk and delaying the normalization of global energy markets. The renewed uncertainty lifted oil prices and reinforced concerns over global inflation, keeping major central banks cautious and financial market volatility elevated.
Indonesia's equity market remains under pressure. Although MSCI maintained Indonesia's current market classification in its 2026 Market Classification Review, sentiment has been weighed down by S&P Dow Jones Indices (S&P DJI). In its Country Classification – 2026/2027 Watchlist, S&P DJI placed Indonesia on the watchlist for a potential market classification change in 2027. Indonesia is one of only three markets included on the watchlist, alongside Turkey and Nigeria.
From the exchange rate and liquidity perspective, Indonesia’s FX reserves in Jun ‘26 increased to USD145.6 bn, while M0-adjusted in May ‘26 expanded by 14.2% YoY to IDR2,228.0 tn. Meanwhile, Indonesia's fiscal deficit reached IDR196.5 tn (0.76% of GDP) as of end-Jun ‘26, with a primary surplus of IDR85.1 tn, supported by strong revenue (+21.4% YoY) and expenditure (+17.8% YoY) growth.
Regards,
KBVS Research Team