The Indonesian government has announced that it plans to issue retail bonds in July. The Finance Ministry’s Director for Bond Management Rahmat Waluyanto said that the government plans to raise IDR2 trillion (US$218.6 million). The Finance Ministry is currently finalizing a list of designated banks and securities firms to distribute the bonds. Around 15 banks and securities firms will be selected for the process. The three-year bonds – Indonesian Retail Bond 001 or ORI001, will be the government’s first ever retail bond issue.
Waluyanto said the bonds will pay interest on a monthly basis and will be tradable at a par value on the bond market. Waluyanto added that the interest rate in the bonds would most likely be between time deposit interest rates, currently between 8 percent and 10 percent, and the yield on ordinary government bonds. The yield on similar term bond is at 12%. The Indonesian government is planning to raise IDR24.9 trillion (US$2.7 billion) in net proceeds from bond sales this year to fund its estimated budget deficit of IDR22.4 trillion (US$2.4 billion), 0.7% of GDP.