JAKARTA: Finance Minister Sri Mulyani Indrawati has revealed that the first Australian-dollar-denominated Indonesian government obligations, or kangaroo bonds, are to be offered in August, but Australian investors appear to be wary of buying them.
The minister shared the news in an opinion editorial for The Jakarta Post written together with Australian Treasurer Jim Chalmers and published last Saturday.
“Subject to market conditions, Indonesia will also issue its first-ever Australian-denominated ‘Kangaroo bond’ in August, a vote of confidence and meaningful step forward, reflecting our deep bilateral ties,” wrote the two senior officials.
They went on to say that the issuance “will open new pathways for Australian investors to find quality investment products, support Indonesia’s growth and strengthen financial integration”.
Online portal Investopedia defines the kangaroo bond as a type of bond issued in the Australian market by nonresidents, denominated in Australian dollars and subject to Australian securities regulation.
The plan to issue kangaroo bonds was first unveiled in May by Sri Mulyani’s deputy Thomas Djiwandono, who revealed the government is also pondering the issuance of yuan-denominated Dim Sum bonds.
Suminto, the ministry’s director general of budget financing and risk management, said in a press conference in May that, beyond expanding the foreign investor base, the move could help reduce borrowing costs and serve as a hedge against currency risks.
However, he declined to disclose the size of the planned issuance. “We are taking a flexible and opportunistic approach,” said Suminto. — The Jakarta Post/ANN
