ank Indonesia managed to absorb Rp 5.97 trillion (US$412.42 million) from the auction of Bank Indonesia certificates, known as 9-month and 12-month SBIs, on Monday.
The order for 9-month SBIs reached Rp 7.88 trillion, while the order for 12-month SBIs reached Rp 6.53 trillion, BI announced, but it only executed Rp 4.18 trillion for 9-month SBIs and Rp 1.79 trillion for 12-month SBIs.
The demand for interest rates from investors ranged between 5.50 and 7.25 percent for 9-month SBIs and between 6 and 7.5 percent for 12-month SBIs, but the bank decided on 6.25 percent for 9-month SBIs and 6.35 percent for 12-month SBIs.
BI Governor Perry Warjiyo said the reactivation of 9-month and 12-month SBIs was to increase the share of foreign portfolios in the country’s financial market.
BI senior deputy governor Mirza Adityaswara said the activation of the SBIs was to diversify the investment instrument because the existing Bank Indonesia Deposit Certificates (SDBI) were only for domestic investors, while the SBI could be bought by both domestic and foreign investors.
“It is how we try to attract more investors from abroad,” added Mirza as reported by kontan.co.id.
BI monetary management director Rahmatullah said the SBI action had taken place since Monday morning.
BI stopped issuing 9-month and 12-month SBIs in 2011 in favor of shorter-term instruments, such as repurchase agreements (repo).
The reissuance of the instrument came amid its decision to keep its key rate -- the seven-day reverse repo rate -- at 5.25 percent following a two-day BI board of governors meeting on July 18 and 19. (bbn)
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