Monthly Market Summary May 2024
In May 2024, Indonesia's inflation fell to 2.8% YoY from 3.0% in April, with monthly inflation falling by -0.03%, although core inflation rose to 1.9% due to higher gold prices. Manufacturing PMI slowed from 52.9 to 52.1 but remained expansive. The trade balance surplus fell from USD 4.5 billion to USD 3.6 billion because the decline in exports was sharper than imports. Bank Indonesia maintained interest rates at 6.25% to maintain Rupiah stability, and the fiscal surplus increased to IDR 76 trillion due to tax revenues. Rupiah bond prices rose with the 10 year bond yield falling to 6.9%, while USD bonds also rose with the 10 year yield falling to 5.26%. The valuation of IDR bonds remains attractive, but USD bonds are less attractive because the sovereign risk premium is below the historical average. JCI and MSCI Indonesia fell 3.6% and 7.4% respectively due to foreign selling and liquidity absorbed by the increase in BI interest rates. The financial sector fell, while commodity and consumer goods stocks rose. See more in the Monthly Market Summary May 2024 from Principal Indonesia.
