Monthly Market Summary April 2024
In April 2024, inflation decreased from 3.05% YOY, to 3.0% YoY due to a decrease in food inflation during the rice harvest season. We see that the Current Account Deficit (CAD) will be at -0.3-1.3% of GDP driven by weakening global demand, falling commodity prices, rising oil prices, and depreciation of the Rupiah amidst uncertain geopolitical conditions and the Fed's interest rate cuts. Bank Indonesia increased interest rates by 25 bps to 6.25%. This is done by BI to maintain the stability of the Rupiah, and keep inflation within the target of 1.5% to 3.5%. In April 2024, Indonesian Government Bonds denominated in Rupiah experienced weakening, with greater weakening in short tenors/10 years and below compared to long tenor bonds/10 years and above after the increase in BI interest rates. JCI closed down 1.9% YTD until April 2024. The stock market, especially the financial, technology and consumer cyclicals industries experienced a decline after the BI interest rate increase. Watch more in the Monthly Market Summary April 2024 from Principal Indonesia.
