Indonesian Stocks, Bonds Drop on Concern Over Budget-Deficit Cap

Indonesia's stocks and government bonds fell after reports that Prabowo Subianto’s administration is moving closer to removing the long-held state budget deficit ceiling, stoking concerns about fiscal discipline and sovereign financing. The potential policy change triggered risk-off positioning, pressuring bond prices (raising yields) and weighing on equity markets.

Analysis

Indonesia's stocks and government bonds fell after reports that Prabowo Subianto’s administration is moving closer to removing the long-held state budget deficit ceiling, stoking concerns about fiscal discipline and sovereign financing. The potential policy change triggered risk-off positioning, pressuring bond prices (raising yields) and weighing on equity markets.