Wednesday, 20 May 2009

SBI Auction Offer Reached 124.22% Above Target

Bank Indonesia Certificate [SBI] was still being sought after by investors who were in excess of fresh fund. The lowering of BI Rate Benchmark from 7.50% to become 7.25% since Tuesday [May 5, 2009] showed that it did not discourage the capital owners to buy. Bank Indonesia which tend to run tight bias money policy in the said auction, surprisingly lowered the indicative target from Rp. 30.30 trillion [April 22, 2009] to merely Rp. 20.60 trillion. It turned out that the total incoming offer/demand had reached Rp. 25.59 trillion or 124.22% of target. But the amount contracted or approved by Bank Indonesia was only Rp. 17.42 trillion or around 68.07% of the total offer of Rp. 25.59 trillion or around 84.56% of the indicative target.Business News source in Bank Indonesia explained that the great enthusiasm of local and international investors for SBI was because the bond was short-termed, liquid, safe, and surely more advantageous compared to SIBOR or LIBOR one month [US dollar] the interest of which was around 0.42%-0.43% per annum. After the legislative election [April 9, 2009] the investors confidence in Indonesia’s economy was growing. The inflow of international fund to Indonesia’s money market remained steady and was predicted to increase provided that the running of the next presidential election 2009 would run just as smoothly and safety. The foreign reserves managed by Bank Indonesia continued to increase from USD 54,840.17 million [March 31, 2009] to become 56.565.91 million [April 30, 2009].

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