BI expects budget deficit in 2004

BI expects budget deficit in 2004

JAKARTA: The central bank expects this year to suffer a budget
deficit of Rp 14.4 trillion (about US$1.71 billion) due to the
rising costs in financing monetary operations.

Bank Indonesia (BI) deputy governor Bun Bunan Hutapea said the
huge deficit was mainly because of the interest the bank had to
pay on large deposits made by the banking sector in BI's
promissory notes facility.

The deposits stood at between Rp 130 trillion to Rp 160
trillion last year.

"For that alone, it cost Bank Indonesia around Rp 13 to 14
trillion to cover the interest payments," Bun Bunan said before
lawmakers during a hearing with a House of Representatives
commission on financial affairs.

In 2003, Bun Bunan said the central bank enjoyed a surplus of
Rp 1 trillion, thanks to the repayment of the central bank
liquidity support facility by the government. -- JP