- Indonesia's FX reserves continued its downward trajectory to USD 144.9 billion in May 2026 despite net capital inflows.
- Domestic sentiment is deteriorating, weighed down by a negative outlook from Moody's and uncertainty surrounding Danantara's new trade entity. Consequently, expectations point to a subdued trade surplus for May.
- Recent key developments include the revised PS2K law and a possible increase in remuneration on government accounts. Market reaction has been muted as investors assess whether these policies offer a credible solution or introduce further uncertainty.
