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Jakarta Post

BI may buy zero-interest bonds to aid budget

  • Adrian Wail Akhlas

    Jakarta

Jakarta   /   Tue, June 30 2020   /  01:00 am
Finance Minister Sri Mulyani (center) together with Central Java Governor Ganjar Pranowo (right) when giving directions to Central Java Provincial Government officials, in Semarang, Central Java, Friday (2/14/2020). Minister of Finance conveyed briefing on strategies to encourage economic growth in Central Java 7 percent in 2023. (Antara/R. Rekotomo)

The government has opened the possibility of Bank Indonesia (BI) buying government bonds with a zero-coupon rate as part of a “burden-sharing” scheme to finance the battle against the COVID-19 pandemic, a senior minister said on Monday.  Finance Minister Sri Mulyani Indrawati said the central bank might bear 100 percent of the coupon rate burden for bonds issued to finance programs that were considered in the public interest, including for health care, social protection and financial support for regional governments. She expected the programs to amount to Rp 397 trillion (US$28 billion).  “We are currently finalizing with the central bank how many government bonds we will sell to the market and how many we’ll sell through private placement to BI,” Sri Mulyani told lawmakers during a hearing on Monday.  Earlier this month, she stressed...