Bond yield soars on news of Mulyani's departure

The benchmark 10-year government bond yield has increased significant by more than 50 basis points (bps) surpassing 9 percent amid market shock on hearing the news of Finance Minister Sri Mulyani Indrawati's move to the World Bank, officials said.
 
"On Tuesday the yield was 8.5 percent, on Wednesday it closed at 8.7 percent. This morning it's already high surpassing 9 percent," Bhimantara Widyadjala, bond director at the Finance Ministry's debt management office, said Thursday.
 
Bhimantara said normally the yield would fluctuate about 5 bps.
 
Director general of debt management Rahmat Waluyanto said credit default swap had increased to 200 bps from 150 bps two weeks ago. "There's a change in the market sentiment toward Indonesia's risk perception," he said.
 
Investors have "taken a wait-and-see position", awaiting news of who will replace Mulyani, said Rahmat. "I hope this impact can be eliminated," he said.
 
President Susilo Bambang Yudhoyono has yet to announce Mulyani's replacement.