Jakarta – Bank Indonesia (BI) has projected this year's current account deficit to hit US$25 billion, a significant increase over last year's $17.53 billion or 1.73 percent of the gross domestic product.
BI senior deputy governor Mirza Adityaswara said that, despite the change in deficit, the economic situation was still stable as $25 billion was under the 3-percent threshold.
He said that, to reduce the deficit, Indonesia needed to record an increase in foreign capital inflow. The change in deficit was the reason why BI reissued BI promissory notes (SBIs) in an auction on Monday, he said.
"Foreign investors are allowed to buy the SBIs, unlike the BI deposit certificate, which can only be bought by domestic investors," he said as reported by kontan.co.id.
Mirza added that he hoped that the SBI could be an alternative instrument for foreign investors who wanted to invest in Indonesia.
BI led the auction for the reissued SBIs with nine and 12-month tenors. The central bank welcomed Rp 14.2 trillion (US$979.29 million) in total incoming bids and took in Rp 5.9 trillion from investors.
The winning bids were given a weighted-yield average of 6.04 percent for SBIs with a nine-month maturity period and 6.71 percent for those with a 12-month maturity.
BI head of monetary management Nanang Hendarsah said investors had shown strong interest in the reissued SBIs, as reflected in the high value of the incoming bids. (ris/dmr)