DBS Group Research economist Radhika Rao discusses Indonesia’s onshore markets as they reopen after the Lebaran holiday to a backdrop of uncertain geopolitics and volatile global sentiment. She notes likely cautious trading in IDR assets, potential budget reallocations and efficiency measures, rising inflation pressures, and reduced prospects for further monetary easing in Indonesia this year.

IDR assets face cautious post-holiday reopening

"Indonesia’s onshore markets are set to reopen following the long Lebaran break, with investors confronting a still uncertain geopolitical environment."

"Global markets have swung between hope and despair amidst signs of a brief respite in hostilities, which is quickly followed by conflicting statements by the key actors."

"Local authorities are reportedly mulling over risk mitigation steps in the face of an increase in energy costs and supply shortages, including work-from-home work policy, seek to curb non-essential use of vehicles/ transport and hybrid school sessions to conserve fuel usage, according to the local press reports."

"Risks to price stability and heightened financial market volatility are likely to dampen expectations for additional monetary easing this year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)