Government Discusses the Possibility of Bank Indonesia Purchasing Zero-Interest Securities to Share the Economic Burden

The Government of Indonesia has raised the option for Bank Indonesia (BI) to purchase zero-coupon sovereign securities as part of a burden-sharing arrangement to fund the fight against the COVID-19 pandemic. 

According to Indonesia’s Minister of Finance, Sri Mulyani Indrawati, BI would bear 100% of the coupon rate burden for securities issued to finance programs that were considered in the public interest, with a value of IDR 397 trillion. Indrawati added that the Government is now finalizing with the BI on how many sovereign securities will be sold to the market and how many will be sold through a private placement to BI.

According to local media reports, the Government has b...