The Indonesia government has set a target of raising a total of Rp532.4 trillion ($43.86 billion) by way of bond issuance in 2016 to support its Budget plans, according to a senior official.
The bond issues will be in multiple currency denomination such as US dollar, euro, yen and China’s renminbi (dimsum or panda bond).
Director General financing and risk management of Finance Ministry office Robert Pakpahan told reporters, that 30 per cent of the total issuance (Rp 159 trillion) will be in foreign currency denomination.
The government will also set aside a significant 20 per cent to raise through the Islamic bond or SUKUK financing route. It is yet to decide on the composition of the bond issuance.
The funds will be used to finance the State Budget for 2016. With the bond issue, Indonesia is targeting a deficit of 2.15 per cent of GDP, capital injection for state owned enterprises Rp58.1 trillion, debt-refinancing Rp256 trillion, debt portfolio management Rp3 trillion and T-bills cash management Rp15 trillion.
The government has issued Rp502.36 trillion or 100 per cent of this year’s target. For 2016 targets, government has issued global bond worth $3.5 billion in this month.
“So the net of the government bonds which will be issued is around Rp330 trillion in domestic and foreign currencies. Front loading in December worth $3.5 billion is part of it,” He said.
He said, another 61 per cent of total gross issuance would come in first half of 2016. Beside the bond issuance, government is also looking at bilateral and multilateral loans worth Rp72.9 trillion to finance the budget deficit and government spending.
For the State Budget 2016, government has set a total spending target of Rp 2,095.7 trillion, while revenues stood at Rp 1,822.5 trillion, leaving a deficit of Rp273.2 trillion, or 2.15 per cent of GDP.