JAKARTA - The government has begun to enter the bond market gradually to maintain investor sentiment and rupiah stability. Finance Minister Purbaya Yudhi Sadewa said funds of around Rp. 2 trillion per day were prepared to enter the government debt or bond market.
"We have entered the bond market gradually. Foreigners have also entered, so it should be more stable in these weeks," said Minister of Finance Purbaya after meeting with President Prabowo Subianto at the Presidential Palace Complex in Jakarta, Monday, May 18.
Purbaya said the funds used came from government cash management or cash management. He said the government still had around Rp420 trillion in cash that could be rotated to maintain market sentiment.
"I ask for Rp2 trillion every day," he said.
According to Purbaya, the funds were not lost. The money was only rotated into the bond market to give a positive sentiment so that foreign investors would remain in and not leave the domestic financial market.
"It's just played so that there is a little positive sentiment in the bond market," he said.
He explained that if bond prices are stable, foreign investors are not encouraged to sell debt instruments and bring their funds out. This condition is expected to help make the rupiah more under control.
Purbaya also targets that the yield or rate of return on bonds can fall. If the yield falls, the bond price rises. Investors also have the opportunity to benefit from the price increase.
"So our bond market should be attractive," he said.
Purbaya said the move would be carried out as needed. However, he has not opened the mechanism that the government will use, including whether through the buyback of bonds or other schemes.
"That's our own strategy," he said briefly.
In a meeting with President Prabowo, Purbaya said the discussion concerned various economic strategies. However, he said the details of the strategy would be conveyed by other parties and would be read in the DPR in the near future.
He emphasized that the discussion did not specifically discuss the rupiah. The President, he said, only asked about the general economic condition.
"The economic foundation is really good. The budget is also good, there is no problem," said Purbaya.
According to the Minister of Finance, what needs to be strengthened is the government's communication to the market and investors so that the good economic conditions are conveyed clearly.
Meanwhile, Bank Indonesia Governor Perry Warjiyo did not say much. He only expressed his confidence that the rupiah would remain stable.
"The rupiah is confident it will be stable," Perry said briefly after a meeting with President Prabowo.
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