- Still-robust domestic demand and the current dovish shift in global rate expectations have created an ideal condition for the government to issue more SBN while keeping the yield stable.
- However, the government has signalled a significant cut to net SBN issuance, opting to lean on the side of caution given the risk of higher volatility amidst the ongoing US political cycle.
- The government may need to balance between SAL financing, external loans, and net SBN issuance rather than depriving the SBN market of new supply altogether.
