ID :
19587
Mon, 09/15/2008 - 16:20
Auther :
Shortlink :
https://www.oananews.org//node/19587
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GOVT TO CUT AMOUNT OF STATE BONDS BY RP 15 TRILLION
Jakarta, Sept 15 (ANTARA) - The government plans to cut the amount of state bonds (SUN) to be issued this year by Rp15 trillion due to current tight market liquidity.
"In the face of tight liquidity the government will be ready to take several measures such as reducing the amounts of state bonds," the head of the fiscal policy of the ministry of finance, Anggito Abimanyu, said here on Monday.
The ministry's spokesman, Samsuar Said, meanwhile, said the country's liquidity condition had until now remained well maintained.
The global market upheavals since July last year had had an impact on the world economy, including Indonesia, causing the financial market to seek a new equilibrium.
The situation had more or less created uncertainty for market players and put the developing countries' market into an unfavorable position because investors tended to liquidate their position in these countries to offset their loss in other places and move to other safer instruments (US bonds) or cash money.
As a result of the situation, liquidity in the financial market in various countries including Indonesia was tight. In the case of Indonesia, the country's growing economy was now needing bigger liquidity and therefore the situation was also affecting liquidity in the national stock market and banking, he said.
He said in macro-economic terms liquidity condition and its prospect in Indonesia were still maintained in the current global market and domestic financial market fluctuations that brought an impact on the development of share price index, state bond market and the rupiah currency.
He said the liquidity maintainance was demonstrated in the implementation in the national state budget plan until August this year in which realization of state revenues especially from taxes had shown an increase of 46 percent so that the state's income had reached 68 percent of the target.
On the expenditure side the target indeed has not been met. However spending for fuel oil subsidy is predicted to decline following the fall of the crude price to reduce state expenditures.
As a result the 2008 deficit is expected to drop from formerly 2.1 percent of the gross domestic product to around 1.7 percent of the GDP. With the drop demand for financing through issuance of bonds will drop by Rp15 trillion which eventually reduce the government's demand for liquidity from the market.
He said the government believed macro-economic liquidity would remain maintained and could support economic development. However problems are also linked to micro-economic liquidity at banking levels, he said.
In view of that the government along with the central bank would take measures necessary to anticipate both micro-and macro-liquidity pressures.
Among the measures to be taken were the government will improve absorption of spending and even speed up disbursement of expenditures for certain bills, reduce issuance of state bonds, speed up revision of Government Regulation Number 1 of 2007 on fiscal incentives for industries, provision of liquidity facilities for banks by the central bank through open market operations or purchase of securities and improving the regulation for the extension of the repurchase agreement facility for easing banks to obtain additional liquidity from the central bank.
He said the government and the central bank were appealing to banks and market players to remain calm and not be provoked to engage in a price or interest rate war that would only harm the industry itself.
He said the government and the central bank would continue to monitor the developments from time to time and coordinate to take necessary measures to minimize loss suffered by the financial industry or the national economy.
"The government and the central bank will maintain the stability of the Indonesian financial system in facing global market fluctuations," he said.
"In the face of tight liquidity the government will be ready to take several measures such as reducing the amounts of state bonds," the head of the fiscal policy of the ministry of finance, Anggito Abimanyu, said here on Monday.
The ministry's spokesman, Samsuar Said, meanwhile, said the country's liquidity condition had until now remained well maintained.
The global market upheavals since July last year had had an impact on the world economy, including Indonesia, causing the financial market to seek a new equilibrium.
The situation had more or less created uncertainty for market players and put the developing countries' market into an unfavorable position because investors tended to liquidate their position in these countries to offset their loss in other places and move to other safer instruments (US bonds) or cash money.
As a result of the situation, liquidity in the financial market in various countries including Indonesia was tight. In the case of Indonesia, the country's growing economy was now needing bigger liquidity and therefore the situation was also affecting liquidity in the national stock market and banking, he said.
He said in macro-economic terms liquidity condition and its prospect in Indonesia were still maintained in the current global market and domestic financial market fluctuations that brought an impact on the development of share price index, state bond market and the rupiah currency.
He said the liquidity maintainance was demonstrated in the implementation in the national state budget plan until August this year in which realization of state revenues especially from taxes had shown an increase of 46 percent so that the state's income had reached 68 percent of the target.
On the expenditure side the target indeed has not been met. However spending for fuel oil subsidy is predicted to decline following the fall of the crude price to reduce state expenditures.
As a result the 2008 deficit is expected to drop from formerly 2.1 percent of the gross domestic product to around 1.7 percent of the GDP. With the drop demand for financing through issuance of bonds will drop by Rp15 trillion which eventually reduce the government's demand for liquidity from the market.
He said the government believed macro-economic liquidity would remain maintained and could support economic development. However problems are also linked to micro-economic liquidity at banking levels, he said.
In view of that the government along with the central bank would take measures necessary to anticipate both micro-and macro-liquidity pressures.
Among the measures to be taken were the government will improve absorption of spending and even speed up disbursement of expenditures for certain bills, reduce issuance of state bonds, speed up revision of Government Regulation Number 1 of 2007 on fiscal incentives for industries, provision of liquidity facilities for banks by the central bank through open market operations or purchase of securities and improving the regulation for the extension of the repurchase agreement facility for easing banks to obtain additional liquidity from the central bank.
He said the government and the central bank were appealing to banks and market players to remain calm and not be provoked to engage in a price or interest rate war that would only harm the industry itself.
He said the government and the central bank would continue to monitor the developments from time to time and coordinate to take necessary measures to minimize loss suffered by the financial industry or the national economy.
"The government and the central bank will maintain the stability of the Indonesian financial system in facing global market fluctuations," he said.
