Indonesia changes variable-rate bond reference to 3-mth T-bills

JAKARTA, March 25 (Reuters) - Indonesia's finance ministry will use its new 3-month T-bills as a reference rate for its variable-rate bond series from Friday, replacing 3-month central bank SBI debt, the debt office said in a statement.

The ministry first issued the 3-month T-bills in an auction this week, after Bank Indonesia stopped regularly selling the 3-month SBI in November to smooth "hot money" flows that could hurt the rupiah currency.

Brokerage Bahana Securities said in a research note on Friday that the lower rate for the 3-month T-bill, at 5.19 percent currently versus 6.37 percent for the last 3-month SBI issue, would translate into a loss of income for banks holding variable bonds.

"Bank Mandiri would suffer the most as it is highly exposed to variable bonds, accounting for approximately 97 percent of its government bond holdings, equivalent to nearly 80 trillion rupiah," said banking analyst Teguh Hartanto.

He said the lower interest income would downgrade Mandiri's earnings by 4.7 percent, with others affected including BNI and BCA .

Holdings of variable-rate government bonds totalled 142.79 trillion rupiah ($16.38 billion) as of March 25, the debt office said. ($1 = 8,717 rupiah) (Reporting by Aditya Suharmoko; Editing by Neil Chatterjee)