BI Hike Looms as Rupiah Rises on FDI

Market Snapshot

Asset	Level	Change
JCI	6,175.54	+1.10%
SET	1,639.04	+0.23%
KLCI	1,731.45	+0.54%
PSEi	6,404.11	+1.25%
STI	5,509.43	-0.54%
USD/IDR	17,971.00	-0.08%
USD/THB	33.61	+0.24%
USD/MYR	4.09	+0.49%
USD/PHP	61.64	+0.19%
USD/SGD	1.29	+0.08%
Brent Crude	89.10	+1.14%
Gold	4,010.90	-0.04%
Bitcoin	65,149.47	+0.71%
Indonesia 10Y Govt Yield	-	-
Thailand 10Y Govt Yield	-	-

Prior Economic Events

Data	Prior	Cons	Actual
No events available

Today's Economic Events

Data	Prior	Cons	Time
Central Bank Interest Rate Decision	5.75	6	23:30

Indonesia’s BI expected to lift policy rate to 6% amid mounting inflation pressures and Q2 FDI gains.
Regional equities mixed with PSEi and JCI leading gains while STI slips; most ASEAN currencies edge weaker versus USD.
Malaysia Q2 GDP surges to 5.8% on exports, lifting 2026 growth forecasts and supporting ringgit stability views.

Yesterday's Recap

Indonesia dominated regional news flow as Q2 foreign direct investment inflows lifted the rupiah 0.08% to 17,971 versus the dollar. Bank Indonesia reiterated that banking liquidity remains stable while confirming it is actively monitoring conditions. Market participants priced a 25 bp rate increase at tonight’s decision, with consensus now at 6.00%.

Malaysia’s Q2 GDP beat expectations at 5.8% on strong exports, prompting AmBank to raise its 2026 growth forecast to 4.8%. Thailand’s baht weakened further on Middle East tensions, falling toward 15-month lows. Philippine and Malaysian equity indices outperformed, with PSEi and KLCI rising 1.25% and 0.54% respectively, while Singapore’s STI declined 0.54%.

Brent crude added 1.14% to $89.10 on supply concerns, providing modest support to commodity-linked ASEAN assets. JCI closed at 6,175.54, up 1.10%, SET finished at 1,639.04, up 0.23%, and KLCI ended at 1,731.45, up 0.54%. USD/THB rose 0.24% to 33.61 while USD/MYR gained 0.49% to 4.09.

The Day Ahead

Indonesia’s central bank will announce its policy decision at 23:30 ET, with markets fully pricing a move to 6.00%. Vietnam will release June FDI disbursement figures, offering fresh insight into supply-chain relocation trends. Thailand auctions THB 12 billion of 10-year bonds, testing demand after recent baht weakness.

Malaysia publishes June CPI data, expected at 1.9% y/y, which will inform BNM’s rate outlook. No major releases are scheduled for Singapore or the Philippines. Traders will also watch USD/IDR and USD/THB moves ahead of the BI outcome for signs of capital-flow pressure.

PSEi at 6,404.11 and STI at 5,509.43 set the tone for regional sentiment into the decision.

Other Economic Notes

Indonesia’s economy shows mixed signals, with strong FDI inflows offset by warnings of eroding confidence and softening domestic demand. Malaysia’s export-led growth rebound contrasts with Thailand’s subdued tourism recovery, highlighting divergent cyclical positions across ASEAN. Vietnam continues to attract manufacturing FDI as global firms diversify away from China, supporting its position as the region’s fastest-growing economy.

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Other Economic Notes (continued)

Commodity price strength, particularly in palm oil and nickel, provides a tailwind for Indonesia and Malaysia but adds to imported inflation risks elsewhere. Regional equity inflows remain selective, favoring markets with clearer growth visibility such as Malaysia and the Philippines. USD/PHP at 61.64 and USD/SGD at 1.29 reflect contained but persistent external pressures.

Global Macro News

Higher-for-longer US rates and renewed Middle East tensions are keeping ASEAN currencies under pressure, with most pairs posting modest losses yesterday. Brent’s advance above $89 supports energy exporters but raises imported inflation concerns for net importers such as Thailand and the Philippines. Global supply-chain shifts continue to favor Vietnam and Malaysia, where June electronics and semiconductor exports remain robust.

Gold’s near-flat performance at $4,010.90 offers limited safe-haven support for regional central banks managing reserve portfolios. Bitcoin’s 0.71% gain reflects broader risk appetite but has minimal direct impact on ASEAN macro flows. China’s ongoing manufacturing slowdown is accelerating FDI relocation into ASEAN, particularly in electronics and autos, sustaining capital inflows into Vietnam and Malaysia.

US data surprises and Fed rhetoric will remain key external drivers for regional FX volatility in the coming sessions.

ASEAN Central Banks Watch

Bank Indonesia is widely expected to deliver a 25 bp hike tonight, lifting the benchmark to 6.00% as inflation pressures build and the committee seeks to anchor expectations. The move would mark a policy divergence from peers, with BI prioritizing rupiah stability over growth support. Bank Negara Malaysia may consider a rate increase later this year if growth remains above trend and oil-driven inflation accelerates, though the committee has so far maintained a neutral stance.

Bank of Thailand faces a softer growth backdrop and is likely to stay on hold, monitoring baht weakness without immediate FX intervention. Bangko Sentral ng Pilipinas continues to balance remittance inflows against imported inflation risks, keeping its easing bias on pause. MAS will next adjust its Singapore dollar NEER band rather than interest rates, with the current slope viewed as appropriate given contained core inflation.

State Bank of Vietnam maintains an accommodative bias to support manufacturing FDI, intervening selectively in the dong to limit volatility while reserves remain adequate.

ASEAN Macro Daily(Beta Mode)