Risk of State Bonds Financing Decreases by Rp31 Trillion
Wednesday, 06 December, 2006 | 14:25 WIB

TEMPO Interactive, Jakarta: The government has succeeded in alleviating risks of debt financing to Rp31 trillion until 2011 after debt switching of State Bonds of Rp6.19 trilion.

The Director General of Debts Management of the Department of Finance Rahmat Waluyanto explained that with the switch offering of Rp9.17 trillion, the government has absorbed funds of Rp6.19 trillion.

In the last auction of this year, the government has shifted 18 bonds that are due in 2007-2011 with a 19-year period of state bonds which is due in 2005.

In the switch, he said, the government has lengthened the average duration of the state bonds portfolio of Rp31 trillion from 2.2 years to 12.43 years. “This indicates that the government has managed debts efficiently and carefully,” said Rahmat.

The success of debt switching, according to him, has shown investors' accountability to the long-term fundamental economic process remains extremely high. Investors' interest to long-term state bonds is also very large.

“In the future, state bonds will become one of the most interesting investment instruments,” he said.

He said that by reducing debts that are due between 2007 and 2011 valued at Rp31 trillion, the government's ability in managing debts and developing the state bond market will be easier in the future.

It means , he said, that the government has more space for activities, having short terms such as T-Bills and Bonds of the Republic of Indonesia or retail state bonds in larger amounts compared to the previous issuance.

“We are optimistic that state bonds management in the future will be better as regards securing the financing of the state budget deficit as well as refinancing debts that fall due,” said Rahmat.

Anton Aprianto