JAKARTA (Reuters): Indonesia's central bank will switch Covid-era government bonds that will mature next year with new, tradeable bonds as part of its operation to buy bonds in the secondary market in 2025, the bank and the finance ministry has announced.
The announcement of the mechanism came after Bank Indonesia (BI) Governor Perry Warjiyo said last week the central bank would purchase government bonds worth 150 trillion rupiah (US$9.23 billion) or more in the secondary market to replace 100 trillion rupiah worth of Covid-era bonds that are set to mature in 2025.
BI would conduct a bilateral debt switch with the finance ministry, exchanging the maturing bonds with regular, tradeable government bonds with a longer tenure using prevailing market prices, BI and the ministry said in a joint statement, without mentioning any amount.
The tenure will be determined in line with BI's needs for monetary operations and considering the government's fiscal sustainability.
BI and the finance ministry are committed to make all transactions transparent, accountable and in line with market mechanisms, they said, underlining that BI and the ministry had conducted similar debt switches in 2021 and 2022.
($1 = 16,250.0000 rupiah) (Reporting by Gayatri Suroyo; Editing by Christian Schmollinger) - Reuters
