"If we look at the governments proposals there will be an additional Rp69 trillion in SBN issuance, mostly to be added to a regular domestic auction," the director general of debt management of the ministry of finance, Robert Pakpahan, said here on Monday.
He said the proportion of bond issue this year will be as planned, consisting of 80 percent of domestic bonds (SUN) and 20 percent of foreign denomination bonds although there will be an increase in the financing target.
"Eight percent of the bonds will be in rupiah denomination and most of them will be sold at the weekly auction and this will be biggest proportion. You can see that every week the SUN auctions can reach Rp8-10 billion," he said.
He added that the government will again issue other foreign denomination bonds, such as global bonds, Samurai bonds and even euro bonds in the second quarter of this year in an effort to attract investors from Europe.
"The target of euro bonds is euro investors. We will cooperate with banks that are used to issuing it. Currently, the liquidity of the euro is high and many corporations or states have already issued these bonds," he said.
Indonesias budget deficit is confirmed to increase from the 1.69 percent target set in the 2014 budget to 2.5 percent of the GDP, leading to a rise in budget financing.
The main source of financing is expected to come from debts, especially from government securities and program loans.
He said the government will also prepare stand-by loans in preparation for possible difficulties in accessing domestic financing.
The proportion of government securities issue is projected to increase from the Rp205 trillion target set at the 2014 budget to
Rp274,7 trillion target in the draft revised budget (up by 34 percent).
The increase in the financing projection is due to changes in the basic macro-economic assumptions and a big rise in financing needs to cover an additional deficit in the draft revised 2014 budget. (*)
Editor: Heru Purwanto
Copyright © ANTARA 2014
