JAKARTA (Reuters) – Indonesia’s central bank will support the government’s affordable housing programme through purchases of bonds in the secondary market, Governor Perry Warjiyo told reporters on Thursday night.
He did not explain how any purchase in the secondary market could provide any funding for the government. Spokespeople for Bank Indonesia (BI) and the finance ministry did not respond to request for comment.
“Support, funding from Bank Indonesia is through purchases of government bonds from the secondary market,” Warjiyo said at a joint press conference with government ministers and a lawmaker.
Warjiyo had previously said BI would buy 150 trillion rupiah($9.19 billion) worth of state bonds in the secondary market this year, 100 trillion rupiah of which will be used for debt switching with maturing pandemic-era bonds.
“I have discussed with the finance minister that the funds could be used not only for debt switching for maturing COVID bonds, but also funding for programmes like housing,” Warjiyo said.
The administration of President Prabowo Subianto has pledged to provide three million affordable houses annually as part of his 2024 election promises.
Finance Minister Sri Mulyani Indrawati said the government is weighing a plan to issue bonds aimed at funding the affordable housing programme, without providing a timeline or the size of the issuance.
By law, Indonesia’s central bank is not allowed to buy government bonds in the primary market, except for treasury bills with a maturity of less than a year.
The governor and the ministers did not take any questions.
Mukhamad Misbakhun, the head of parliament’s finance commission who attended the press conference, later told reporters details of the central bank’s funding support for the housing programme will be released as soon as next week after a hearing with parliament.
($1 = 16,325.0000 rupiah)
(Reporting by Stefanno Sulaiman; Writing by Fransiska Nangoy, Gayatri Suroyo; Editing by Bernadette Baum, William Maclean)
