The issuance of state treasury notes, proposed by the International Monetary Fund, may serve as a solution if the money market is volatile, Director General of Financing and Risk Management at the Finance Ministry Robert Pakpahan noted here on Monday.
"If we have a one-month instrument, we will not necessarily raise long-term yield in case of a bad market," he remarked.
He said the issuance of short-term treasury notes may help the directorate general of treasury to manage the state cash.
"If the market is bad and there are indications of it improving in the next two months, then why will we not issue one-month treasury notes? For instance, if this month, we need Rp5 trillion, we can issue one-month state treasury notes," he explained.
In the notes of finance of the draft 2018 state budget, the government plans to issue one-month state treasury notes to support the management of cash next year.
The government has, so far, issued rupiah-denominated debt paper in the domestic market in the form of state bonds and Shariah state bonds, or sukuk, with a tenure of 2-30 years, and state treasury notes and Shariah state treasury notes, with a tenure of up to 12 months. (*)