Indonesia central bank buys long-term sovereign sukuk at auction following rule change
JAKARTA – Indonesia’s central bank made its first direct purchase of long-term government sukuk in primary auctions on Tuesday and Wednesday following a relaxation of regulations to help the sovereign finance additional spending to tackle the COVID-19 pandemic crisis, Onny Widjanarko, Executive Director Communications Department told Salaam Gateway.
“We bought 1.72 trillion rupiah in regular auction on Tuesday and 2.93 trillion rupiah in Green Shoe Option (GSO) auction on Wednesday,” said Onny.
Bank Indonesia issued new regulation Peraturan Anggota Dewan Gubernur No.22/5/PADG/2020 on Monday that allows the regulator to buy long-term government bonds and sukuk in primary auctions without going through intermediaries such as brokers or main dealers. This is a derivative rule of government regulation in lieu of law No.1/2020 on state financial policy recently introduced by the government to tackle the COVID-19 pandemic crisis.
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