Today, Bank Indonesia (BI) bought Rp16.98 trillion (US$1.15 billion) of state bonds through a private placement as part of burden sharing scheme with the government to handle the COVID-19 impact to the domestic economy - Photo by the Central Bank Office

JAKARTA (TheInsiderStories) – Today, Bank Indonesia (BI) bought Rp16.98 trillion (US$1.15 billion) of state bonds through a private placement as part of burden sharing scheme with the government to handle the COVID-19 impact to the domestic economy. It was second transaction by the central bank after agreed to purchase Rp82.1 trillion of bonds on August 10.

The notes have  four series namely VR0034, VR0035, VR0036, dan VR0037 with total amount Rp20.52 trillion, each. The VR0034 will mature on August 10 of 2025, VR0035 due on August 10 of 2026, VR0036 has maturity until August 10 of 2027, and VR0037 will end on August 10 of 2028. The ministry said, each series has coupon rate 3.8 percent

Director general at the finance ministry office, Luky Alfirman, said, that this transaction is an implementation of the burden sharing scheme as a form of synergy between the government and BI in an effort to finance the handling of the impact of the COVID-19 and national economic recovery program (ERP).

He continued, The bond issuances is the first transaction to fulfill part of the financing of public goods such as health, social protection, as well as sectoral financing of ministries, agencies, and local governments in the context of handling COVID-19 and ERP worth of Rp397.56 trillion.

This transaction is made based on the joint decree of the minister of finance and the governor of BI number 347/KMK.08/2020 and 22/9/KEP.GBI/2020 signed on July 20 regarding schemes and the coordinating mechanism for purchasing state or Sharia bonds by the cental bank in the primary market and cost sharing in the context of financing impact management the pandemic and ERP.

The deal also in accordance with the authorities granted by law Number 24 of 2002 concerning the government bond and the regulation of the minister of finance Number 51/PMK.08/2019 concerning state bond sales through a private placement. This private placement transaction is carried out by adhering to several key principles like maintaining credibility and integrity of fiscal and monetary policy management.

Then, maintaining fiscal space and sustainability in the medium term and implementing prudent, transparent and governance accountable. Furthermore, the issuance of the bonds for both, public and non-public goods to handle the COVID-19and ERP, it will be carried out in stages according to the target which have been set.

US$1: Rp14,700

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