BI to dominate ownership of ‘pandemic bonds’ as debt burden grows

first_imgThe government will issue nearly Rp 450 trillion (US$27.21 billion) worth of the so-called pandemic bonds to finance the country’s efforts to combat the health crisis and economic turmoil caused by the COVID-19 pandemic, according to a Finance Ministry document.Apart from the pandemic bonds, the government is also planning to increase its bond sales target by Rp 160.2 trillion to Rp 549.6 trillion to address the widening budget deficit, which could reach 5.07 percent of gross domestic product (GDP).[RA::Indonesia to issue Rp 450 trillion in ‘pandemic bonds’ to finance COVID-19 fight::https://www.thejakartapost.com/news/2020/04/06/indonesia-to-issue-rp-450-trillion-in-pandemic-bonds-to-finance-covid-19-fight.html]Indonesia raised $4.3 billion from global bonds on Monday, including the longest-dated US dollar bond ever issued by an Asian nation, Reuters reported. The deal was finalized in the US and sold in maturities of 10.5 years and 30.5 years, worth $1.65 billion each, with a 50-year tranche worth $1 billion. It was Indonesia’s largest-ever bond. Bank Indonesia (BI) will dominate ownership of the nation’s “pandemic bonds” as the government seeks to safeguard the economy from COVID-19 at the risk of a rising debt burden, including from its longest ever 50-year bond tenure, economists say.Bank Permata chief economist Josua Pardede said that foreign investors would be reluctant to buy risky assets including Indonesia’s sovereign debt papers amid the current market routs.“The financing of pandemic bonds may be dominated by the central bank as foreign investors tend to avoid risky assets,” Josua told The Jakarta Post during a phone interview. “We expect that this will speed up the recovery of economic sectors affected by the COVID-19 pandemic.” “The debt burden will rise, but it will not surpass the legal debt-to-GDP ceiling ratio of 60 percent,” Center of Reform on Economics (Core) Indonesia research director Piter Abdullah told the The Jakarta Post.The government’s decision to issue a 50-year global bond will create unnecessary risks as the government must pay a high interest rate for a long period of time, he added.“A 50-year global bond is meant to provide buyers with incentives as their investment appetite has significantly declined amid the global uncertainties caused by the virus,” Piter said, adding that he opposed the government’s decision to issue such a bond because of payment difficulties.“This increases the risk for the government to pay debts with higher interest rates as it has a better option to issue debt papers in rupiah that can be bought by the central bank using a quantitative easing scheme.”Under the new Government Regulation in Lieu of Law (Perppu) No. 1/2020 issued last week, Bank Indonesia (BI) is now permitted to buy government bonds at auction to anticipate if the market is unable to fulfil the government’s financing target. The regulation revokes a 1999 law on the central bank, which only allowed BI to buy government bonds in the secondary market.Read also: Indonesia announces Rp 405 trillion COVID-19 budget, anticipates 5% deficit in historic movePresident Joko “Jokowi” Widodo has announced Rp 405.1 trillion in extra state spending to finance Indonesia’s battle against the novel coronavirus, specifically for healthcare, social safety net and business recovery programs.“However, we expect the debt-to-GDP ratio to increase to around 34 to 35 percent this year, from last year’s figure of 29.8 percent,” Josua said. “Inflation may also rise as the central bank bought government debt papers, but it will still remain within BI’s target.”Anugrah Sekuritas Indonesia fixed income analyst Ramdhan Ario Maruto said that international rating agencies may downgrade Indonesia’s sovereign credit rating, following rating downgrades on Indonesian companies.Fitch and Moody’s did not immediately respond upon being asked for comment by the Post.Indonesia’s sovereign credit rating from the three top rating agencies currently stands at the lower-end of the investment grade, which allows a full range of institutions worldwide to invest in the country’s debt papers. Any downgrade would return the country’s rating to junk, which would result in only select investors being eligible to invest in the country’s financial assets.“As long as the government can maintain the country’s debt-to-GDP ratio at a safe level, I think the rating agencies would at least affirm our ratings even during times of hardship like today,” said Ramdhan.Topics :last_img read more

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When is the Masters in 2020? New dates, TV schedule & other details for rescheduled major

first_imgMORE: New dates for golf majors in 2020Silver lining: We still have a chance to watch the revered tournament, which was merely postponed instead of canceled, a la the British Open. And the beautiful backdrop of the Augusta National Golf Club will remain the same, albeit in fall colors in lieu of the traditional spring.Here are the updated dates, schedule and details for the 2020 Masters Tournament:When is The Masters in 2020?Date: Nov. 12-15Location: Augusta National Golf ClubThe Masters was forced to forgo its usual spring date and will instead take place from Nov. 12 through 15. Apart from the change in dates and scenery, not much will change for the 2020 Masters: It will still take place at the historic Augusta National Golf Club, and will still draw millions of viewers as one of golf’s most prestigious tournaments.Masters TV schedule 2020TV channel: ESPN, CBS, fuboTVLivestream: WatchESPN, CBS All Access, fuboTVThe Masters will continue to be broadcast by ESPN (early round coverage) and CBS. Program scheduling remains to be determined.MORE: Tiger Woods’ timeline at The Masters2020 golf majors scheduleThere exists one notable difference with The Masters in 2020, and it relates to the other golf majors on the schedule. Instead of serving as the first major of the season, it will now act as the final one of the season. The PGA Championship will take place Aug. 6-9, followed by the U.S. Open on Sept. 17-20. The British Open might have taken The Masters’ position as the final major of the season, had the R&A not outright canceled the event entirely for 2020. Golf fans will have to wait a little longer this year to experience “a tradition unlike any other.”The Masters Tournament, originally slated to take place April 9-12 as the first major of the 2019-20 PGA Tour, will now take place much, much later in the season as the third and final major championship of the season. The change in date was necessitated, of course, by the onset of the COVID-19 pandemic: The Augusta National Golf Club announced the decision on March 13 as the sports world rushed to adjust to the coronavirus. MajorDateLocationPGA ChampionshipAug. 6-9TPC Harding Park (San Francisco)U.S. OpenSept. 17-20Winged Foot Golf Club (Westchester County, N.Y.)The MastersNov. 12-15Augusta National Golf Club (Augusta, Ga.)British OpenCanceledN/AWhy was The Masters postponed?The Masters was the first of golf’s four majors to postpone its event. That decision came on March 13, as soon as it became apparent the coronavirus pandemic would have a significant impact not only on the U.S. sports world, but society at large.Said Fred Ridley, chairman of Augusta National Golf Club: “Ultimately, the health and well-being of everyone associated with these events and the citizens of the Augusta community led us to this decision. We hope this postponement puts us in the best position to safely host the Masters Tournament and our amateur events at some later date.”We will continue to work with the World Health Organization, Centers for Disease Control and Prevention, the Office of the Governor, the Georgia Department of Public Health, the City of Augusta and all other local authorities. We are grateful to all of these entities for their exceptional efforts and guidance.”last_img read more

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