The Head of the Hajj Financial Management Agency said could uses their funds to help Bank Indonesia (BI) if the government of the Kingdom of Saudi Arabia abolished the pilgrimage this year due to the COVID-19 pandemic - Photo by the Agency

JAKARTA (TheInsiderStories) – The Head of the Hajj Financial Management Agency said could uses their funds to help Bank Indonesia (BI) if the government of the Kingdom of Saudi Arabia abolished the pilgrimage this year due to the COVID-19 pandemic. Currently, the agency has deposits around US$600 million for these activities.

According to the head of the pilgrimage fund, Anggito Abimanyu, so far his office managed about Rp135 trillion (US$9.0 billion) of investment funds. Most of the funds, he continued were invested in Sharia state bond, including to support the handling of COVID-19 pandemic.

Based on presidential regulation Number 53 of 2020, the central bank can buy government bonds in the primary market by cooperating with other parties such as Hajj fund managers and others. In accordance with an agreement with the finance ministry, BI can buy as much as 25 percent of the total issuance with applicable interest.

Finance minister Sri Mulyani Indrawati has stated, Indonesia plans to releases state bond Rp886 trillion in the rest of 2020 and the amount could widens as the government has plans to expand the budget deficit from 5.07 percent of gross domestic products to 6.27 percent. In the first quarter (1Q) of 2020, the country has issued Rp221.4 trillion.

“It will be issued in the domestic, retail, private placement, and still looking the opportunity to issues global bonds. In the last two weeks the auctions has ranged between Rp35 – 45 trillion,” said the minister, Sri Mulyani Indrawati, at the hearing with parliament through video conference last month.

Based on the proposed 2020 State Budget, the government targeting gross issuances of the bonds worth of Rp1,289.3 trillion debt to finance the expanding deficit 5.07 percent of gross domestic products (GDP) and repay the mature bond Rp433.4 trillion. Indrawati revealed, the state budget deficit worth of Rp852.9 trillion from the original planned Rp307.2 trillion.

Beside from the bond issuances, the budget deficit and other spending around Rp150 trillion will finances from the surplus budget Rp70.46 trillion, endowment funds, public service agencies, private placements from state-owned enterprises, Indonesia Deposit Insurances, Hajj Fund, others, as well as multilateral loans up to $8 billion.

In the meeting, the minister reported in the 1Q is estimated that the economic growth around 4.5 percent, inflation 2.96 percent, average Rupiah rate 15,553 a US Dollar, interest rate 3.19 percent, average oil price $34.21 a barrel, oil lifting 701.6 million barrels, and gas lifting 1,048 million metric.

“This year’ the economic growth will depend on COVID-19 and the government consumption (56 percent of total spending),” said Indrawati.

In the proposed 2020 State Budget, she elaborated, in this year, the government’ revenues will decrease by 10 percent to Rp1,760.9 trillion or 78.9 percent of the targeted worth of Rp2,233.2 trillion. In details, tax revenue will drop 5.4 percent from Rp1,865.7 trillion to Rp1,452.5 trillion, customs duty dropped 2.2 percent from Rp223.1 trillion to Rp208.5 trillion, and non-tax revenues fell to 26.9 trillion.

State expenditure will increase 102.9 percent from the ceiling of Rp2,540.4 trillion to Rp2,613.8 trillion. Beside, the government savings the spending around Rp190 trillion, which is ministries and institutions Rp95.7 trillion, regional and village funds of Rp94.2 trillion and reallocation of reserves of Rp54.6 trillion.

The additional expenditure Rp255.1 trillion and below the lines for the national economic recovery program of Rp150 trillion.

US$1: Rp15,000

Written by Staff Editor, Email: theinsiderstories@gmail.com