JAKARTA: Indonesia aims to nearly double its retail bond sales volume this year from 2018 levels, hoping to attract more millennial investors through online sales and reduce its dependence on foreign funds, a finance ministry official said on Thursday.
The government plans to sell retail debt papers worth as much as 80 trillion rupiah ($5.70 billion) in 10 planned issuances this year, Loto Srinaita Ginting, director of govenrment securities at the ministry, told reporters during the first day of sale of savings bonds.
Last year, Jakarta raised 46.01 trillion rupiah from five retail bond issuances.
High foreign bond ownership has made Southeast Asia's largest economy vulnerable to sudden capital outflows, sometimes triggered by global events outside of Jakarta's control.
Sell-offs in Indonesian bond and equity markets last year due to rising U.S. interest rates, the U.S.-China trade war and its own ballooning current account deficit, sent the rupiah to its lowest since 1998 Asian financial crisis.
Foreign investors currently hold around 37 percent of Indonesia's high-yielding sovereign bonds, while local individual investors own less than 5 percent, according to finance ministry data.
This year, the government will be flexible in its budget financing strategy, given changes in market predictions on the number of times the U.S. Federal Reserve could possibly hike interest rates, Ginting said.
The government could reduce the volume of dollar-denominated bond issues if market pressure increases again and might shift to more retail bond sales or multilateral loans, she said.
"So in this time of uncertainty, bond issuance strategy becomes more flexible," Ginting said.
Jakarta plans to sell bonds worth a total of 825 trillion rupiah in 2019, including short-term treasury bills and buybacks, to fund an estimated fiscal deficit of 1.84 percent of GDP.