Indonesia Daily Focus August 19, 2026

BI increased SRBI absorption by +300% WoW to IDR20.0tr from IDR5.0tr, amid strong demand of IDR80.7tr, largely concentrated in the 12M tenor at IDR71.7tr. Despite higher absorption, awarded yields declined across tenors to 7.06% (6M), 7.21% (9M), and 7.37% (12M), giving BI greater room to manage liquidity while maintaining SRBI’s role in supporting Rupiah stability.

Foreign portfolio inflows moderated by -79% WoW to just IDR900bn last week, with IDR2.7tr of SRBI inflows offsetting outflows of IDR1tr from equities and IDR820bn from SBN. Continued SRBI demand and BI’s additional incentives have helped the Rupiah appreciate by around +1% MTD toward IDR17,800/USD, making it the second-best performer among regional peers after the Korean Won.

We expect BI to hold its policy rate today, supported by the Rupiah stabilizing near IDR17,800/USD, 5Y CDS declining to 84bps, and total foreign inflows reaching IDR9.6tr in the first two weeks of Aug-26, led by IDR9.5tr into SRBI. With the 12M SRBI–BI Rate spread narrowing to 162bps from 189bps, BI’s non-rate instruments appear increasingly effective, reducing the urgency for another rate hike while limiting additional pressure on domestic growth.

The Rupiah remained relatively stable at IDR17,857/USD alongside a steady DXY at 99.64, while 10Y and 2Y INDOGB yields edged lower to 7.17% and 6.81% despite UST yields rising to 4.73% and 4.19%, respectively. INDOGB–UST spreads consequently narrowed to 243.7bps (10Y) and 262.4bps (2Y), highlighting SBN resilience against higher global yields, although the increasingly compressed yield premium warrants caution on further gains.