Purbaya says bond market intervention has begun since last week
Jakarta (ANTARA) - The Indonesian Finance Minister Purbaya Yudhi Sadewa said that his ministry has started intervening in the bond market since last week. ‘From Thursday last week a little, yesterday a little more. Now I will see again how it develops,’ Purbaya said after presiding over a de-bottlenecking hearing in Jakarta, on Tuesday.
Purbaya explained that the steps currently being taken are still conducted through cash management. He said the bond market condition remains relatively under control, so the government does not yet need to broaden interventions through other schemes. ‘There is indeed a plan to manage it; there are two ways to enter: through a framework, or through our own cash management. This is only cash management. If the framework is used later, I will call in SMI (PT Sarana Multi Infrastruktur) and others to participate. But for now it is not that severe; the situation is still relatively decent. Yesterday I set a target of Rp2 trillion, but only Rp600 billion was realised,’ he explained.
Furthermore, the State Treasurer said that the limited value of the transactions indicates that selling pressure in the bond market is not too large. Therefore, the government is currently focusing on ensuring bond prices stay under control amid market volatility. ‘In other words, the sellers of bonds are also relatively few. So we are ensuring bond prices remain under control,’ he added.
Earlier reports indicated Purbaya would be more active in the bond market as a step to help stabilise the rupiah exchange rate. ‘We have entered the bond market gradually. Foreign investors have also entered, so going forward in the coming weeks it should be more stable,’ Finance Minister Purbaya said after a limited meeting with President Prabowo Subianto at the Presidential Palace Complex in Jakarta, Monday (18/5).
‘I will enter the bond market every day,’ he added.
The government plans to operate the Bond Stabilisation Fund using the available budget. When asked further about the amount of funds to be deployed, Purbaya said he was asking for Rp2 trillion to enter the bond market each day.