JAKARTA (TheInsiderStories) - Indonesia will seeks $5 billion from World Bank (WB), Asian Development Bank (ADB) and other multilateral agencies to cover the 2015’s Budget deficit as the government’s tax revenues could be shortfall this year. The government also considers raising up to $1 billion of global bonds to finance the deficit..
Indonesia will issue around Rp 500 trillion ($34.25 billion) worth of bonds in 2016, of which up to 30 percent could be in foreign currency. The goovernment now is in talks with several parties like Noor Bank from United Emirates Arab, as it searches for the right investor for the private placement.
Finance Minister Bambang Brodjonegoro, said on Monday the budget deficit may be wider than previous estimate of 1.9 percent of total Gross Domestic Product (GDP). He stated that the deficit is expected to increase to 2.23 percent or around Rp 260 trillion from the previous Rp 222.5 trillion set in the 2015 Revised State Budget.
Scenaider Siahaan, a director at Finance Ministry’s budget financing and risk management office added that the World Bank had agreed to provide an additional $2 billion, while the ADB would provide an extra $1 billion to be handed over by the end of this year.
“We already have standby loans worth $1.2 billion from several sources, including the World Bank, ADB and KfW Development Bank,” he said by adding the funding also could strengthen foreign exchange reserves, which the central bank said fell to $103 billion this week.
Bank Indonesia Governor Agus Martowardojo, said Indonesia needs other options remained available if it required additional funding to increase the country’s foreign reserves. The list of options currently includes a $15 billion bilateral currency swap arrangement (BCSA) with China and a $22.76 billion bilateral swap arrangement (BSA) with Japan.
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