Indonesia's finance ministry is planning another retail bond issue between August and September this year, a director at the finance ministry said on July 18. Bhimantara Widyajala, director in charge of debt management at the ministry, said the yield on the paper would be higher than the average interest rate for a 12-month bank deposit.
"The paper would be offered between August 27 and September 7, and issued on September 12," Widyajala told Reuters. "We are cutting the maximum amount that can be bought by an investor to 1 billion rupiah ($110,400), as we want to spread the distribution and we don't want the buyers to be concentrated in one area," he added.
The issue would be the country's third retail bond after the ministry raised 6.23 trillion rupiah from the second batch in March and 3.28 trillion rupiah in August 2006.
Indonesian bonds have attracted strong demand in recent months due to expectations of lower interest rates. The central bank cut its benchmark interest rate, known as BI rate, again this month to 8.25 percent, down from 12.75 percent at the beginning of 2006.