Indonesia's finance ministry plans to buy back floating-rate rupiah government bonds maturing September 25 this year, to capitalise on recent falls in bot elaborate on the size of the buyback. "Bond prices are cheap now," Widyajala told Reuters by telephone text message.
The planned bond buyback, which would be the ministry's first this year, came after falls in domestic asset prices on Friday as US subprime mortgage woes hit high-yielding but risky assets in emerging markets such as Indonesia.
Indonesian assets have earlier this year risen off the back of carry trades, in which investors borrowed low-yielding currencies - typically the yen - to fund investments in assets such as rupiah government bonds with higher returns. Some of those positions were unwound on Friday.