JAKARTA. The government says it has raised Rp 9.95 trillion (US$1.03 billion) from a debt paper auction on Thursday, exceeding its initial target of Rp 7 trillion.

It was the largest offer to date this year.

Finance Ministry debt management chief Robert Pakpahan told The Jakarta Post that the government raised only Rp 9 trillion during a debt auction on Jan.16, while bids at Thursday’s auction reached Rp 29.3 trillion.

Higher inflation expectations among bond investors increased the weighted average yields for long term debt paper.

According to the ministry, yields for 10-year and 15-year debt papers surged by 0.04 percent and 0.03 percent, respectively, higher than those sold at auction on Jan.29.

“Investors are seeking higher yields, as they are afraid of inflationary pressures in upcoming months caused by possible increases in gas, and even subsidized fuel, prices,” BCA Sekuritas’s debt capital market s chief Herdi Ranu Wibowo said.

“There are also fears among investors that the recent trend of rupiah depreciation might cause ‘import inflation’,” he added.

Government data shows that that yields declined by 0.91 percent for three-month treasury bills (T-bills) and by 0.08 percent for the one-year T-bills, lower than those sold on Jan.15.

“The buyers of the T-bills were mainly banks that usually have excessive liquidity in the beginning of the year. That’s why the government could sell the T-bills with lower yields,” Herdi said.

The government plans to raise Rp 180.4 trillion this year through securities to tackle the budget deficit. (sat/ebf/The Jakarta Post)

Editor: Edy Can