Indonesian bank to buy up to $ 30.5 billion in bonds directly from government

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JAKARTA, Aug.23 (Reuters) – Indonesia’s central bank to directly buy sovereign bonds worth up to Rs.439 trillion ($ 30.46 billion) in 2021 and 2022 under new deal with the Ministry of Finance, CNBC Indonesia reported Monday, citing a government document.

The program is similar to an agreement BI had with the ministry last year to fund soaring health care and welfare bills amid the COVID-19 pandemic, a decision BI and the ministry des Finances had both pledged not to repeat.

CNBC Indonesia reported that BI will purchase up to 215 trillion rupees for 2021 and 224 trillion rupees in 2022 through private placement sales, with the proceeds being used to finance the government’s vaccination campaign and others. COVID-19 assistance measures.

The Bank of Indonesia (BI) will waive interest payments on bonds worth 58 trillion rupees in 2021 and 40 trillion rupees in 2022, but the remainder of the notes will carry an interest rate float equal to the central bank’s three-month reverse repo rate, according to the news site.

The finance ministry and central bank did not immediately respond to a request for comment from Reuters.

Last year, BI agreed to buy Rs 397.6 trillion in interest-free bonds as part of a $ 40 billion budget deficit financing program. Investors and economists have raised concerns about the effects of the program on inflation and the rupee. ($ 1 = 14,410.0000 rupees) (Gayatri Suroyo report edited by Ed Davies)


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