"Currently OJK is finalizing its preparation that next year the program could be launched," OJK chief commissioner Muliaman D Hadad said.
Jakarta (ANTARA News) - The Financial Service Authority (OJK) said it hopes that the regional bond program could be launched in 2016.

"Currently OJK is finalizing its preparation that next year the program could be launched," OJK chief commissioner Muliaman D Hadad said here on Wednesday.

He said OJK in cooperation with other stakeholders was seeking to wrap up drafting new regulation and removing all hurdles hampering implementation of the program.

"In the past several months OJK in cooperation with the finance ministry, home affairs ministry and the Supreme Audit Agency (BPK) have sought to abolish all restrictive regulations," he said.

Muliaman said he could not set a date when the new regulation is to be issued but he hoped it could be issued early next year.

Deputy Finance Minister Mardiasmo said the government would encourage regional administrations to issue regional bonds, but they must be selective especially as many regional administrations have large idle funds in unspent budget.

"Budget spending is low in the regions , but we encourage regional administration using funds from non budget sources and regional transfer funds," Mardiasmo said.

He said the government hopes that regional administration to issue bonds mainly to finance large infrastructure projects.

"Prudence in management, however, is needed to prevent default on the repayment of the bond debt," he added.

Currently a regional administration almost certain to issue bond is the West Java administration that needs Rp3 trillion to resume construction of an airport in Sumedang.

"The West Java administration is set to issue bond , but it has yet to secure approval from the regional legislative assembly," he added.

Information made available to Antara news agency said a number of other regional administrations planning to issue bonds include South Sulawesi, North Sumatra and Central Java regional administrations.(*)

Editor: Heru Purwanto
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