GOVT PAYS RP15.8 TRILLION LESS INTEREST

Jakarta, Jan 4 (ANTARA) - Finance Minister Sri Mulyani Indrawati said the government in 2009 paid Rp93.8 trillion in interest or Rp15.8 trillion less than the ceiling set in the 2009 Revised State Budget at Rp109.6 trillion.

"The reduction in interest payments could happen because economic stability has been maintained increasing market confidence in the credibility of fiscal management and that the debts have been managed prudently to cause reduction in the debt cost," she said here on Monday.

She said the economization came from the drop in the yield of state debentures by 1.82 percent in 2009. This is a record in itself, she added.

"This is also an extreme record because it was made while yields in the world rose during 2009 as the amount of state debts were up significantly," she said.

She said market confidence in Indonesia was also reflected by the net buying of state debentures (SUN) by foreign parties reaching Rp19.65 trillion.

Besides the drop in the yields economization also came from debt management strategy like front loading that had reduced pressures on the domestic market, debt switch and buybacks.

In addition to them, she said, appreciation of the rupiah by 15 percent in 2009 had also given a quite positive sentiment to Indonesia.

By December 31, 2009, according to the Directorate of Debt Management, total state debentures issued by the government reached Rp979.46 trillion.

T.M041