Minister of Finance Sri Mulyani Indrawati believes Indonesia still has access to the market in absorbing government securities (SBN) for financing COVID-19 even though there was panic by market players in April and June 2020.
"Even though in such a situation Indonesia has a good reputation, we still have access to the market," she said in a virtual CNBC Debate on Global Economy in Jakarta, Friday.
According to the Minister of Finance, despite entering the financial market during turbulence because of the COVID-19 pandemic, the government SBN is still absorbed by investors because it offers attractive interest rates. The 10-year SBN yield is 6.9 percent as of October 1, 2020.
Minister of Finance continued that the government is also working with domestic financial market players and also Bank Indonesia (BI). The involvement of the central bank in buying government SBN on the primary market is because it requires enormous financing and is in an unprecedented or authentic situation.
"BI can also buy government SBN on the primary market without creating the impression that we will threaten BI's independence. This is authentic, we need a lot of communication, at the same time designing the right policies," she said.
Even so, the Minister of Finance ensured that the policy was carried out carefully and was not haphazard and transparent.
The COVID-19 pandemic crisis caused the government to widen the 2020 state budget fiscal deficit, which previously reached 1.7 percent, now to 6.34 percent of Gross Domestic Product (GDP).
For handling COVID-19 and national economic recovery, the government has allocated Rp.695.2 trillion, of which for health, social protection, MSME support, and business incentives.
"We are very careful about using choices and policies and instruments. This is very important when we have to stabilize the market when we have to have sustainable debt and also so we can save people and their livelihoods," she added. (Antaranews)