ASEAN KEY DESTINATIONS
Indonesia may sell dollar bonds to locals
Indonesia may offer dollar-denominated conventional and Islamic bonds targeted at local investors this year, to curb price swings caused by capital outflows.
"In the next issuance of global bonds, we might want to increase the allocation for domestic investors, or we might issue entirely in the domestic market," Rahmat Waluyanto, director-general of the Finance Ministry's debt management department, said in an interview in Jakarta on Tuesday.
"We need to be vigilant as this can cause some potential risks, especially if there is any trigger to market volatility."
The dollar debt of Southeast Asia's largest economy has handed investors a gain of 16.3 percent in the past year, indexes compiled by HSBC Holdings Plc show, the best returns in the region.
Indonesia plans to sell Rp 200.6 trillion rupiah ($22.1 billion) of local and foreign debt in 2011 to fund a budget deficit estimated to reach Rp 124.7 trillion, 1.8 percent of gross domestic product.
The government may not offer rupiah bonds to global markets, unlike the neighboring Philippines which has already sold peso bonds twice overseas in the past four months, Waluyanto said.
The increase in foreign ownership of rupiah government bonds to 30.8 percent as of January 10 from 0.5 percent in 2003 is a consideration, he said.
Indonesia's bonds will be "well received," whether sold locally or overseas, said Branko Windoe, head of treasury at PT Bank Central Asia in Jakarta.
"We are moving closer to becoming an investment-grade country."
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