June 29, 2020 / 4:21 AM / 14 days ago

Indonesia c.bank may buy govt bonds with zero to low yields -finmin

JAKARTA, June 29 (Reuters) - Indonesia’s finance minister said on Monday the government may sell more bonds to the central bank to finance its COVID-19 response, including some that would carry zero yield, via private placement.

Bank Indonesia (BI) may bear 100% of the interest rate burden to finance some government programmes that were considered public goods, like health spending, social protection and support for regional government budgets, in total amounting to 397 trillion rupiah ($28 billion), Finance Minister Sri Mulyani Indrawati told parliament.

BI may also finance non-public goods programmes by buying bonds that carry a coupon rate of one percentage point below its benchmark rate, Indrawati said, adding that she and BI Governor Perry Warjiyo were still discussing the amount to sell to the central bank and to the market.

Warjiyo, who was also at the hearing, reiterated BI was ready to “share the burden” and said both sides would ensure good governance. ($1 = 14,170.0000 rupiah) (Reporting by Gayatri Suroyo and Tabita Diela; Editing by Martin Petty)

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