* Indonesia to use foreign currency bonds less, cites
exchange rate risks
* No yen bond issuance seen in 2013, plans dollar global
* Issuance seen balanced across the year
By Rieka Rahadiana and Adriana Nina Kusuma
JAKARTA, Jan 21 Indonesia expects foreign
currency bonds to make up a smaller proportion of its overall
issuance this year, reflecting a sharp weakening in the
country's rupiah currency, the head of its debt office said on
Robert Pakpahan, Director General of Debt Management, told
Reuters the proportion of bonds issued in foreign currencies
would drop to 14.5 percent in 2013 from 20 percent last year,
and that Indonesia would not borrow in yen this year. It does
intend to sell two dollar-denominated global bonds.
"We're trying to reduce a little bit our exposure to
exchange rate risks," Pakpahan said in a interview, adding: "In
2013, I don't plan to take any yen because Samurai bonds require
a JBIC guarantee and the last guarantee was in 2012."
Indonesia requires a guarantee from the Japan Bank for
International Cooperation (JBIC) to issue yen bonds.
The Japanese currency also remains strong compared to the
rupiah despite tumbling against major forex crosses, which
Pakpahan said was a major factor in the decision to withdraw
from the Samurai market.
Indonesia remains comfortable with foreign investors holding
around a third of its relatively high-yielding government bonds,
"The only concern is the current account (deficit) ... and
exchange rate. (But) looking at the ample (global) liquidity and
strong (domestic economic) growth, we are still fine."
The government and central bank last week instructed
state-controlled oil and gas firm PT Pertamina to stop buying
dollars on the open market to ease pressure on the rupiah.
One of last year's worst performing currencies, the rupiah
has fallen 0.31 percent so far this year as investors worry
about Indonesia's widening current account deficit.
The G20 economy plans to hold a roadshow in March for its
planned sales of two global bonds in dollars, to be issued in
the first and second halves of the year.
It also plans to sell its first dollar-denominated domestic
bonds in the second half of 2013, probably in a size of less
than $1 billion, reflecting estimated demand, Pakpahan said.
Indonesia will issue its first retail-targeted sharia bonds
on February 8, he said.
Bond issuance will be split more or less evenly between the
first and second halves of the year, he said.
Indonesia is targeting a 2013 budget deficit of 1.65 percent
of economic output, slightly lower than 1.77 percent this year,
but has already said the deficit could widen, largely because of
the cost of fuel subsidies.
(Reporting by Rieka Rahadiana, Adriana Nina Kusuma and Jonathan
Thatcher; Editing by Catherine Evans)