Finance Minister Sri Mulyani Indrawati have serious talked with Chairman of Federal Reserves Jerome Powel at the G20 Ministerial and Governor Meeting in Bali (12/10) - Photo by the Committee

JAKARTA (TheInsiderStories) — Indonesian government issued global bond with valued US$3 billion for 2019 budget pre-funding, according to Finance Ministry’s General Directorate of Financing and Risk Management official statement, Tuesday (12/04). The bonds will be released in three series, RI0224, RI0229, and RI0249.

The issuance taken as government’s quick access to US Dollar market, considering conducive market condition following United States’ President Donald Trump and China’ President Xi Jin Ping deal to halt the trade war for 90 days.

Worth of the bonds have been determined, $750 million with 4.75 percent coupon for RI0224, $1.25 billion with 4.75 percent coupon for RI0229, and $1 billion with 5.35 percent coupon for RI0249. Maturities for these bonds are 5 years, 10 years, and 30 years respectively.

These Indonesia government’s global bonds will be listing on Dec. 11 in Singapore Stock Exchange and Frankfurt Stock Exchange. The third series received Baa2 rating from Moody’s, BBB- from Standard & Poor’s, and BBB from Fitch.

The government set the deficit target in 2019 State Budget worth of Rp296 trillion (US$20.41 billion) or 1.84 percent to gross domestic products and the financing Rp296 trillion.

Other than that, Indonesia Finance Ministry will issue a special Sharia bond, Waqf Linked Sukuk in January 2019. For its initial issuance, official targeted Rp 54 billion worth.

Indonesia plans to issue government bond around Rp825.70 trillion in 2019. This figure is lower than the amount in 2018 State Budget of Rp885.69 trillion.

The declining is in line with the government planned to lowering the amount of the debt in 2019. Based on the official statement, the net issuance in 2019 is predicted worth of Rp359.25 trillion, down from the figure in the 2018 State Budget of Rp399.18 trillion.

For the deficit financing, in 2019, Indonesia will also receive loan assistance from several multilateral partner institutions, such as the World Bank, the Asian Development Bank, which is intended for the development of natural disaster affected areas in Lombok and Central Sulawesi.

The government also continues to find innovative ways of the financing through the issuance of retail bond with online formats or other creative financing models. Issuance of online retail bond is conducted with the consideration of increasing domestic investor participation, in line with the strategy to reducing foreign ownership and foreign currency debt.

This year, the government has issued sovereign bonds in two foreign currencies US dollar and Euro, following the successful issuance of global and euro bonds in 2017.

According Finance Ministry senior official Loto Ginting, issuing dual currency bonds is another government effort to resolve the 2018′ State Budget deficit. She said, the financing strategy is aiming to meet the optimal financing cost and risk levels, supporting the development of financial markets, and improving transparency and accountability of management of financing policies.

Here’s 2019 State Budget’ macro assumption :
  • Economic growth: 5.3 percent
  • Inflation: 3.5 percent
  • Rupiah exchange rate againts US Dollar: Rp 15,000
  • T-bills interest rate for 3 months: 5.3 percent
  • Indonesia crude oil price: US$ 70/barrel
  • Average oil lifting: 775,000 barrel/day
  • Average gas listing: 1.25 million equivalent to oil/day
  • Jobless rate: 4.8-5.2 percent
  • Poverty rate: 8.5-9 percent
  • Gini ration: 0.38-0.385 percent
  • Human development index : 71.98
  • State revenue: Rp 2,165.1 trillion
  • State expenditure: Rp 1,461.1 trillion
  • Primary balance: negative Rp 20.1 trillion