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Jakarta Post

Unlocking potential of diaspora bonds

  • Dwinanda Ardhi Swasono and Nopriyanto Hady Suhada

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PREMIUM
Jakarta   /   Tue, February 11, 2020   /  01:10 pm
Unlocking potential of diaspora bonds Finance Ministry government debt paper director Loto Srinaita Ginting (kontan.co.id/Adinda Ade Mustami)

The government is planning to issue diaspora bonds in 2020, according to Luky Alfirman, director general of debt and risk management at the Finance Ministry. Luky said the issuance of such bonds aimed to widen the Indonesian investor base and diversify existing instruments. This instrument will be issued in a form of electronic bonds (eSBNs). It all comes down to the question of whether Indonesia will eye success in issuing diaspora bonds. Diaspora bonds are known as fixed income securities issued by countries that want to borrow money from nationals living abroad. They function like any other bonds and are open to all investors but have historically specifically targeted members of the diaspora. Researchers have found that diaspora bonds work better when they are long-dated, fixed interest rate securities that can be redeemed only at maturity. According to the Asian Development Ba...

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