GOVT ISSUES RP20 T STATE SHARIA BONDS SINCE 2008

Jakarta, Oct 6 (ANTARA) - The government has since 2008 issued state sharia bonds (SBSN) worth Rp20 trillion to meet part of financing target in the state budget, a Finance Ministry official said.

The bonds were issued either through a book building or private placement method, the ministry's director general of treasury, Herry Purnomo, said on Tuesday.

The issuance of state sharia bonds had indicated a positive development to help offset a deficit in the state budget, he said in his opening address to an investor gathering at the ministry.

This year's budget deficit has been set at Rp139.5 trillion, or 2.5 percent of the country's gross domestic product (GDP). The government plans to sell a total of Rp 99.6 trillion in bonds this year.

Herry said the government will for the first time issue state sharia bonds of Rp1.5 trillion in an auction on October 13 this year.

The state sharia bonds up for the auction are series IFR0003 and series IFR0004 which will be issued under a sales and lease back agreement. The two types of bonds will be payable in 6 years and 11 years respectively.

Herry said the state budget needs support to finance its deficit and therefore, the government will keep encouraging the market for state sharia bonds.

"I think that auction method in the issuance of sukuk (sharia bonds) will be more efficient and can encourage transparency and development in the secondary market," he said.***2***