Govt to issue Rp 3t bonds this month<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government will auction some Rp 3 trillion (about US$353
\nmillion) worth of bonds on April 27, the Ministry of Finance
\nannounced on Tuesday.<\/p>\n
In a press statement the ministry said the bonds would mature
\non Oct. 15, 2011.<\/p>\n
The government plans to issue a total of Rp 28 trillion worth
\nof domestic bonds this year in a bid to help finance the current
\nstate budget.<\/p>\n
It has so far issued some Rp 4.5 trillion bonds, the first was
\nin February (Rp 2 trillion) and the second was in March (Rp 2.5
\ntrillion).<\/p>\n
The government also issued its first international bonds since
\nthe 1997 financial crisis, totaling US$1 billion. The issue has
\nreceived strong interest from global investors, who are heartened
\nby rising stability in the country's economic conditions and the
\nissue's rarity at a time when global interest rates are
\ndeclining.<\/p>\n
Last month's issue was also oversubscribed by a factor of two
\namid strong demand from investors. The bonds were issued at a
\nweighted average yield of 11.57 percent, lower than the 11.82
\npercent average yield for the bonds issued in February.<\/p>\n
Analysts have said the current declining trend in domestic
\ninterest rates has created great interest in government bonds,
\nparticularly as pension and insurance companies have started to
\nswitch some of their money from bank time deposits into bonds.<\/p>\n
The interest on time deposits currently averages around 6
\npercent, compared to a coupon rate of 11 percent for government
\nbonds.<\/p>\n
Plans by Bank Indonesia to reduce the frequency with which it
\nauctions its SBI promissory notes -- from a weekly basis to once
\na month starting in June or July -- have also forced banks to
\nseek alternative vehicles in which to invest their excess
\nliquidity.<\/p>\n
Foreign investors have also shown increased interest in the
\ngovernment's domestic bonds also because of a declining trend in
\nglobal interest rates.<\/p>\n
The purchase of domestic bonds by foreign investors is likely
\nto help further strengthen the local currency as dollars will
\nflow into the country as a result.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-issue-rp-3t-bonds-this-month-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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