Jakarta – Indonesia will slow down foreign borrowings and focus more on the domestic bond market to fund government projects, Finance Minister Bambang Sudibyo said Wednesday.

Increasing reliance on domestic financing would improve the country's balance of payment position, Bambang said at a hearing of the parliament's budget committee.

"In the medium term, the government will seek financing from the domestic bond market as a substitute for foreign borrrowing. We will stimulate the domestic bond market," he said. "We hope the role of the domestic bond market will become more important from next year onward," he added.

The finance chief also said the government was planning to reduce the budget deficit to below five percent of gross domestic product (GDP) for the nine months starting April 2000. The government has forecast a deficit of 6.8% of GDP in the year to March 2000.