Indonesia to sell Rupiah bonds to individual investors

Indonesia to sell Rupiah bonds to individual investors

Aloysius Unditu, Bloomberg/Jakarta

Indonesia plans to sell local currency bonds for the first time aimed at individual investors in the next two years, the director general of the Finance Ministry said.

So-called retail investors usually mean individuals rather than large institutions such as banks, pension funds and insurance companies. The bonds are usually offered in smaller amounts to make them affordable to the average person with funds to invest.

"Assuming incomes of Indonesians increase next year, we are looking for retail investors with Rp 10 million (US$1,000) to Rp 50 million in their hands," said Mulia Nasution, director general for the treasury at the ministry in Jakarta today. Selling to local investors such as these will help Indonesia expand its domestic market, he said.

The government has been selling local-currency Treasury bonds to pay off higher-yielding debt that it issued in the midst of the Asian financial crisis in 1997 and 1998. It spent 600 trillion rupiah to bail out lenders during the crisis by selling so-called recapitalization bonds.

The bonds for individual investors will be listed on the Surabaya Stock Exchange that trades the securities, Nasution said. "We are still working out the details."

Indonesia had the equivalent of $140 billion of debt outstanding, including $78.8 billion overseas at the end of May, central bank data show.