Reforestation funds remain in SBIs

Reforestation funds remain in SBIs

JAKARTA (JP): The Ministry of Forestry would unload its Rp 1.2
trillion (US$333 billion) in reforestation funds placed in Bank
Indonesia Certificates (SBIs) only if President Soeharto orders
to do so, the ministry's secretary-general said yesterday.

Oetomo said the ministry would continue to roll over its SBIs
at maturity to help the monetary authority keep liquidity in
check.

"The reforestation funds will remain in SBIs -- we'll wait for
orders from the President directly or through the state
secretary," Oetomo said at his office.

He added that even the minister of forestry could not disburse
the funds from Bank Indonesia, but the central bank could release
the funds with the minister's approval.

SBIs are short-term, rupiah-denominated obligations issued by
the central bank to drain excess liquidity from the market.

Minister of Forestry Djamaludin Suryohadikusumo said early
September that his ministry had deposited at least Rp 1.2
trillion of reforestation funds in SBIs in August to help the
falling rupiah.

He said reforestation funds collected by the ministry from
forestry companies totaled about Rp 2 trillion.

Before being deposited in SBIs, most of the funds were kept in
the country's seven state-owned banks, including Bank Rakyat
Indonesia, Bank Bumi Daya, Bank Tabungan Negara, Bank Pembangunan
Indonesia, Bank Negara Indonesia, Bank Dagang Negara and Bank
Ekspor Impor Indonesia.

Oetomo said the ministry would prefer to withdraw the funds
than keep them in SBIs.

"If we could choose, we would rather keep the funds in other
banks, because they offer higher rates. But we keep them in SBIs
for the country's sake," he said.

The rates for SBI papers are 14 percent for one-day SBIs, 15
percent for two-day to six-day SBIs, 16 percent for one-week
SBIs, 20 percent for one-month SBIs, 19 percent for two-month
SBIs and 18 percent for three-month SBIs. (08)