Indonesian bond plan sparks fears over governance, monetisationBank Indonesia’s plan to buy bonds that will be issued by the government to fund its ambitious housing program is raising more concerns over the nation’s debt governance.
The plan for the central bank to effectively help fund the home-ownership scheme of President Prabowo Subianto is raising concerns over so-called debt monetisation and macroeconomic governance, analysts say. Bank Indonesia, which already plans to purchase more than US$9 billion of government bonds this year, said last week it would buy the newly announced property-linked debt in the secondary market.