Economist: Merah Putih Bond Has Potential to Deepen Financial Markets

Economist at the Institute for Development of Economics and Finance (INDEF) M Rizal Taufikurahman assesses that the Merah Putih Bond has the potential to deepen the national financial market.

“The Merah Putih Bond has the potential to deepen the financial market if it truly creates a new source of long-term financing outside the State Revenue and Expenditure Budget (APBN), bank credit, and Government Securities (SBN),” Rizal told ANTARA in Jakarta on Thursday.

According to him, this instrument can attract pension funds, insurance companies, institutional investors, and public funds to enter strategic and productive projects.

Therefore, the potential of the Merah Putih Bond is considered quite large for strengthening national financing capacity while reducing dependence on short-term funds and external financing.

“If the underlying project is unclear, cash flow is weak, and governance is not transparent, the Merah Putih Bond actually risks merely shifting funds from SBN or other corporate bonds, so that the market-deepening effect becomes illusory,” he added.

Regarding incentives, Rizal said the forms provided should ideally be competitive coupon tax rates, market maker facilities, proportional prudential treatment for institutional investors, as well as strict transparency and project reporting standards.

Overall, he assesses that the attractiveness of this instrument must ultimately be supported by project quality, issuer credibility, a clear risk structure, and market-aligned yields.