What Is A Government Debt Letter: Here's The Explanation
What Is A Government Debt Letter (image Tumisu - Pixabay)

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YOGYAKARTA - Government Securities (SUN) are Securities issued by the Government. SUN is used by the government to fund government budget needs, such as to cover the shortage of the State Revenue and Expenditure Budget (APBN). Let's find out more about what state debt securities are!

From the government section, SUN is useful for finding a budget to finance the state budget. Meanwhile, from the buyer's section or capital grower, SUN is a financial product that offers profits, with interest or bond payments and the ability to increase prices (capital gains).

In its lay language, this SUN is proof that the government owes investors a certain duration. The government guarantees interest payments and the principal of the SUN according to the validity period.

What Is The Physical Form Of SUN?

Government Securities can be issued in the form of a warkat or without a scriptless. State Debt securities, which are currently spread, are issued in a form of non-warkat. State Debt securities can be issued in a form that can be traded or cannot be traded.

For this form, investors do not need to be afraid to buy or capitalize items that are not visible because there is a fact that the purchase is in the form of an invoice. This fact can be used tomorrow for disbursement of the main budget for investors when SUN is due.

What Is The Purpose Of Issuing Government Securities?

For the government, SUN was issued to(1) fund a shortage of APBN,(2) cover short cash shortages, and (3) regulate the state loan portfolio. The central government has the right to issue SUN after finding DPR approval which was ratified within the framework of ratifying the APBN and after consulting with Bank Indonesia.

Who manages Government Securities?

The Directorate General of Debt Management (DGT). The DGT obligations that are adrift of the SUN management are preparing formulation and implementation of SUN management policies which include: planning for a maximum portfolio form; implementation of issuance, sales, repurchase and

exchange; risk management of the SUN portfolio; development of infrastructure and SUN market institutions; as well as announcement of data regarding SUN management are sourced at technical wisdom which was inaugurated by the Director General.

Benefits Of SUN For Investors

SUN is an alternative investment that is relatively free of risk of default. SUN shares opportunities for investors and market players to carry out its portfolio diversification to minimize the risk of capitalization.

The increase in capital profit on SUN, as well as on loan letters, usually comes from coupon income (interest) and the excalation capacity of prices (capital gains) from bond prices.

SUN is a capital instrument that is free of risk of default due to interest payments or coupons and is basically confirmed by the SUN Law. Therefore, every year the Government budgets for coupon payments or principal SUN in the APBN.

SUN products such as State Bonds can also be used as collateral and can be sold at any time if the owner needs money.

So after knowing what state debt securities are, see other interesting news on VOI, it's time to revolutionize news!


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