TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Govt raises Rp 223.97t from debt papers in Q1, economist warns of risks

Rates of returns from this year’s auction of the government’s debt papers declined.

News Desk (The Jakarta Post)
Jakarta
Wed, March 27, 2019

Share This Article

Change Size

Govt raises Rp 223.97t from debt papers in Q1, economist warns of risks Economist Faisal Basri (The Jakarta Post/vny)

T

he government has raised Rp 223.97 trillion (US$15.76 billion) from the auction of conventional and sharia government debt papers implemented along the first quarter of 2019.

The figure was 21.07 percent higher than the target set by the Finance Ministry's Financing and Risk Management Directorate General, which was Rp 185 trillion.

From 14 auctions in the first quarter, offers from investors were recorded at Rp 580.75 trillion. The largest offer, namely Rp 93.93 trillion, occurred during the auction on Feb. 26, but the government only executed Rp 22 trillion of them.

Rates of returns from this year’s auction of the government’s debt papers declined.

Kontan.co.id reported that during the auction on Jan. 3, the rate of SUN series FR0077 for five years was at 7.98 percent, but on Tuesday’s action, the rate declined to 7.01 percent or 97 basis points lower. The rate of return of Series FR0078 for 10 years also declined from 8.05 percent to 7.56 percent or 49 basis points lower.

Earlier this year, the average return of SUN series FR0077 was 8.7 percent, but during Tuesday’s auction the return declined to 8.08 percent or 62 basis points lower.

Institute for Development for Economics and Finance senior economist Faisal Basri warned the government about the risk of an increasing ratio of government debt papers in overall government debt.

“If we have difficulty to pay installments of our bilateral and multilateral loans, there are still fora to resolve the problem. But if we cannot pay out debt papers, we will be punished by the market as investors will sell the government’s debt papers,” Faisal said on Tuesday.  

He noted the portion of the government’s debt papers in the rupiah was always higher than the debt papers in foreign exchange. However, the ownership of rupiah debt papers by foreign investors was also high, namely 38.55 percent as of March 22.

The high ownership of rupiah debt papers by foreign investors is a greater risk to the country’s financial stability, he added.

“Ownership of the local currency’s government debt papers in China and India was only 4 percent. It is 15.7 percent in Thailand, 16 percent in Brazil, 18 percent in Turkey and 24.6 percent in Malaysia. Indonesia is at risk to global fluctuations because foreign investors could sell all of their assets,” he added. (bbn)

{

Your Opinion Counts

Your thoughts matter - share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.