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RI eyes cheaper financing with yuan, Aussie bonds
The Finance Ministry says the issuance will depend on which market offers more favorable conditions in terms of pricing and costs.
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A bank employee counts Chinese yuan notes next to US dollar notes on Jan. 26, 2023, at a Kasikornbank branch in Bangkok. (Reuters/Athit Perawongmetha)
I
ndonesia is preparing to follow a global trend of diversifying government debt issuance as it plans to issue bonds in Chinese yuan and Australian dollars later this year.
The move comes amid rising economic uncertainty in the United States fueled by US President Donald Trump’s tariff policies.
Analysts praise the initiative as a strategic move to attract a broader base of global investors and reduce borrowing costs, but they also urge the government to closely monitor economic policies in the target countries and remain cautious of potentially weak demand for bonds in nontraditional currencies because of concerns over market liquidity.
Deputy Finance Minister Thomas “Tommy” Djiwandono announced at a press conference on May 23 that the government was pondering to issue so-called Dim Sum bonds and Kangaroo bonds for the first time, marking a push to diversify its sovereign debt instruments.
Suminto, the ministry’s budget financing and risk management director general, said there was a “strong consideration” to launch the bonds this year, depending on market conditions.
Beyond expanding the foreign investor base, he noted, the move could help reduce borrowing costs and hedge against currency risks.
However, he declined to disclose the size of the planned issuance.
