Govt repays maturing bonds in cash<\/p>\n
Dadan Wijaksana
\nThe Jakarta Post
\nJakarta<\/p>\n
The government said it had repaid in cash some Rp 3.9 trillion
\n(US$431 million) worth of bank recapitalization bonds maturing on
\nThursday by using part of proceeds from the sale of assets under
\nthe Indonesian Bank Restructuring Agency (IBRA).<\/p>\n
\"Yes, we made the payment in cash for the bonds just in time,\"
\nAnggito Abimanyu, a senior official at the Ministry of Finance,
\ntold The Jakarta Post.<\/p>\n
Anggito's statement was confirmed by an official at Bank
\nIndonesia, saying the central bank had received official
\nnotification from the ministry to use the funds from a
\ngovernment's account at the central bank.<\/p>\n
The government issued around Rp 430 trillion-worth of bonds in
\nthe late 1990s to finance the recapitalization of several ailing
\nbanks. The first tranche of bonds to mature is worth Rp 3.9
\ntrillion.<\/p>\n
Reports said that most of these bonds were held by Bank
\nCentral Asia (BCA).<\/p>\n
The government has previously said it would later issue bonds
\nworth Rp 3.9 trillion to replace the proceeds taken from IBRA.
\nThe House of Representatives has given its approval on the bond
\nissuance plan.<\/p>\n
There had been concerns expressed earlier that the cash-
\nstrapped government might be unable to repay the maturing bonds.<\/p>\n
The government had initially planned to issue treasury bills
\n(T-bills), a special type of bond with a maturity period of 6
\nmonths to 12 months, to refinance the maturing bonds.<\/p>\n
This could not be done as the House has yet to pass the bill
\non sovereign debt securities into law, which would provide a
\nlegal basis for the T-bills.<\/p>\n
After that, lawmakers also blocked the government's plans to
\nuse funds designed for an emergency.<\/p>",
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