- Indonesia's FX reserves declined slightly to USD 152 Bn in July, due to maturing FX bonds and BI's continued intervention amid outflow from SRBI and stocks.
- Declining SRBI outstanding and yield reflect BI's tendency to pursue a more convergent policy as Rupiah stayed stable during July.
- On the other hand, continuing inflow into domestic bonds reflects expectations of dovish monetary policy, while increased inflow to SVBI/SUVBI points to a robust commodity export performance in July.
- We foresee a stagnant-to-declining trend for FX reserves as potential inflows from pessimistic US economic outlook are countervailed by exports headwinds from US tariffs and increased imports.
