Indonesia govt to sell nearly US$11 billion bonds to central bank by year end

JAKARTA : Indonesia's government will sell 157 trillion rupiah (US$10.94 billion) of bonds to the central bank before the end of 2021 to utilise a fiscal deficit financing deal agreed in August, according to a presentation from the finance minister.

The government had already sold 58 trillion rupiah of bonds to Bank Indonesia (BI) earlier this month.

Under the August agreement, BI offered to buy bonds below market prices, amounting to 215 trillion rupiah in 2021 and 224 trillion rupiah in 2022, in order to help the government manage interest payments amid rising debt during the COVID-19 pandemic.

Finance Minister Sri Mulyani Indrawati said on Tuesday the year's tax take had been strong due to a boom in commodity prices.

In addition, the deal with BI and the government's use of cash reserves meant authorities were able to scale back a bond issuance target by 263.5 trillion rupiah this year, Sri Mulyani said.

Total revenue in the year to November was 19.4per cent higher than the same period a year before, amounting to 1.699.4 trillion rupiah and Sri Mulyani reiterated that the revenue target will likely be surpassed.

Total spending this year as of last month was 2,310.4 trillion rupiah.

The fiscal deficit was at 611 trillion rupiah in November, or 3.63per cent of GDP, compared with the latest 2021 budget deficit outlook of within a range of 5.1per cent to 5.4per cent of GDP.