Indonesia to downsize global sukuk issue – source

July 28, 2010 By Leave a Comment

July 27 (Reuters) – Indonesia will downsize a global sukuk issue planned for this year, as it cuts its debt issuance because of a government forecast for a lower-than-expected budget deficit, a source told Reuters on Tuesday. The source familiar with the sukuk issue did not give the size of the expected cut.

Indonesia had aimed to raise up to $650 million in a global sukuk issue in October, a finance ministry official said earlier this month [ID:nJAK428520] (Reporting by Adriana Nina Kusumua and Dicky Kristanto; Writing by Neil Chatterjee)

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S.Korea official: June CPI roughly as expected

July 2, 2010 By Leave a Comment

July 1 (Reuters) – South Korea’s June inflation, although below market expectations, came in line with the government’s projection, and rising core inflation deserves watching, a senior finance ministry official said on Thursday.

“We had expected 2.7 percent (growth in consumer prices in June), and so (the actual 2.6 percent growth) is roughly in line with our projection,” Yoon Jong-won, head of the ministry’s economic policy bureau, told a small group of reporters. (Reporting by Yoo Choonsik; Editing by Jonathan Hopfner)

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S.Korea to give banks time to meet FX steps-report

June 11, 2010 By Leave a Comment

June 10 (Reuters) – South Korea plans to give banks, both domestic and foreign, two years to adjust their currency forward positions when it announces restrictions on such trades early next week, an online media outlet reported on Thursday.

The government also plans to cut the ceiling on currency forwards by export companies down to 100 percent of their physical trades from 125 percent at present, the EDaily report quoted an unnamed finance ministry official as saying. (Reporting by Yoo Choonsik; Editing by Jonathan Hopfner)

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Euro zone readies giant rescue package for Greece

April 12, 2010 By Leave a Comment

(Reuters) – Euro zone finance ministers approved a giant 30-billion-euro ($40 billion) emergency aid mechanism for debt-plagued Greece on Sunday but stressed Athens had not requested the plan be activated yet.

Together with at least 10 billion euros expected from the International Monetary Fund in the first year, it could add up to the biggest multilateral financial rescue ever attempted.

“With today’s decision, Europe sends a very clear message that no one, any longer, can play with our common currency, no one can play with our common fate,” Greece’s Prime Minister George Papandreou said in a statement.

In a rare weekend telephone conference, finance ministers of the 16 nations that share the single European currency backed a detailed plan for Greece to borrow from euro-zone governments and the IMF at significantly below market rates.

IMF chief, Dominique Strauss-Kahn, said the IMF was ready to provide help, possibly through a multi-year standby loan arrangement, and is set to hold talks with Greek, EU and European Central Bank officials in Brussels on April 12.

“The IMF stands ready to join the effort, including through a multi-year stand-by arrangement, to the extent needed and requested by the Greek authorities,” he said in a statement.

He welcomed the euro zone’s financial package for Greece, calling it an important step that will also help safeguard financial stability in the euro area as a whole.

A Greek Finance Ministry official said it was logical to expect the package would amount to significantly more than 40 billion euros over 3 years. Earlier in the day, he had said it could hit 80 billion euros, but later corrected this.

If Greece obtains aid, the package could dwarf past IMF bailouts for Mexico and Argentina. The largest IMF commitment ever made to a country was the $47 billion arrangement for Mexico approved in April 2009 under a so-called flexible credit line; Mexico has not drawn from the credit line.

The firepower in the Greek package, even if held in reserve, may reassure investors and make them more willing to continue buying Greek bonds. But big uncertainties remain over the longer-term prospects for reducing Greece’s debt mountain, which have dented confidence in the euro.

The Greek official said the government would decide within a few days whether to ask for the aid, depending on whether market interest rates subside.

European Economic and Monetary Affairs Commissioner Olli Rehn said the 3-year euro zone loans would carry an interest rate of about 5 percent — well below current market rates of about 7.3 percent. That responds to Greece’s appeal to be able to borrow at rates closer to its peers in the currency area.

Assistance for subsequent years would be decided later.

“If the mechanism had to be activated, it would not be a violation of the no-bailout clause (in the European Union treaty) since the loans are repayable and contain no element of subsidy,” Jean-Claude Juncker, chairman of the Eurogroup of finance ministers, told a Brussels news conference.

A German government official welcomed the agreement, which he said should enable Greece to do its fiscal “homework” on deficit reduction without market distraction.

“It should contribute to a calming of the markets so that Greece can take care of its homework in peace and quiet.”

Rehn said all euro zone countries would pay proportionately to their share in the ECB’s capital, making Germany by far the biggest lender, followed by France and Italy.

Talks on coordination with the IMF will begin on Monday, he said.

“GUN ON THE TABLE”

The agreement was urgently awaited because Athens is due to auction short-term debt on Tuesday after investors last week sent Greek borrowing costs spiraling due to fears of a possible default and doubts over the EU safety net.

Papandreou made clear in a newspaper interview that detailing the rescue plan was a last-ditch effort to deter speculation against his country.

“The question remains whether this mechanism will convince markets just like a gun on the table. If it does not convince them, it is a mechanism that it is there to be used,” he told the Sunday edition of To Vima.

But Finance Minister George Papaconstantinou told reporters after Sunday’s decision that Greece hoped to be able to continue to borrow smoothly on financial markets.

Skepticism over Greece’s ability to manage its 300 billion euro ($400 billion) debt pile, more than its 240 billion euro annual economic output, grew last week. Investors dumped Greek stocks and bonds, and ratings agency Fitch downgraded Athens’s debt by two notches on Friday.

Fitch lowered Greece’s credit rating to BBB-, the lowest investment grade just above junk, saying a deepening recession and rising debt service costs would make it harder for Athens to meet its budget deficit reduction target.

The government has imposed tough austerity measures to meet a pledge to cut the public deficit by four percentage points of gross domestic product to 8.7 percent this year.

Juncker said data provided by Greece showed the fiscal consolidation programme were encouraging and showed Athens was on track to reach this year’s target. Rehn said Greece would not be asked for further cuts this year, but would have to take more deficit-cutting steps, notably on pensions, in following years.

Strong public opposition to any bailout for Greece in Germany, Europe’s biggest economy and main paymaster, had fueled market doubts about the availability of any rescue.

Germany, the Netherlands and Austria argued that any emergency loans should be at current market rates to avoid moral hazard that would ensue if profligate countries were rewarded.

However, euro zone officials broke the deadlock on Friday, based on the IMF pricing formula with adjustments, Rehn said.

The euro, which has been dragged down by concerns over Greece and possible contagion with other weak Mediterranean euro zone economies, rebounded slightly on news of Friday’s technical agreement among deputy finance ministers and central bankers.

The risk premium that investors charge to hold Greek debt rather than benchmark 10-year German bonds narrowed to just over 400 basis points after hitting a record 454 on Thursday.

However, any durable reduction in the spread will depend on the credibility of the EU rescue plan and markets’ assessment of how likely it is to be invoked.

Greece needs to borrow about 11 billion euros by the end of May to refinance maturing debt and interest charges. Its overall 2010 borrowing requirement is 53 billion euros.

(Additional reporting by Marcin Grajewski in Brussels, Erik Kirschbaum in Berlin, Michele Kambas in Nicosia, Lesley Wroughton in Washington and Ingrid Melander in Athens; writing by Paul Taylor; editing by Michael Roddy and Gunna Dickson)

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Factbox: Terms of euro zone emergency loans to Greece

April 12, 2010 By Leave a Comment

(Reuters) – Euro zone finance ministers agreed on Sunday to the terms of emergency loans for Greece, should the debt-stricken country be unable to finance itself on the market. Below are the key points of the agreement.

WHO WOULD LEND TO GREECE?

All countries using the euro and the International Monetary Fund. Euro zone member states would contribute to the loans according to their respective holdings in the European Central Bank capital. For a detailed breakdown see: (here)

BURDEN SHARING IN LOANS

The euro zone would provide two-thirds of all loans requested by Greece and the IMF would supply the remaining one-third.

LENGTH OF STAND-BY LOAN PROGRAM

Three years

THE AMOUNT

30 billion euros from the euro zone in the first year. The IMF could lend Greece up to 10-to-12 times its IMF quota of $1.25 billion, which would mean $12.5 billion to $15 billion (some 11.1 billion euros). A senior Greek finance ministry official said he would expect the IMF to lend Greece at least 10 billion euros in 2010. He also said that it would make sense if the whole three-year program was 80 billion euros.

INTEREST

For the euro zone, variable rate loans would be made on the basis of three-month EURIBOR rates, while fixed-rate loans will be based upon the rates corresponding to Euribor swap rates for the relevant maturities.

On top of that, there will be a charge of 300 basis points. An additional 100 basis points will be charged for loans longer than three years. In conformity with IMF charges, a one-timeservice fee of maximum 50 basis points will be charged to cover operational costs.

The statement said that for a three-year loan to Greece as of April 9, the interest would be “around five percent.”

The IMF prices its loans less, Economic and Monetary Affairs Commissioner Olli Rehn said.

HOW TO GET IT

Greece has to request the money, because it is unable to finance itself on the market. The ECB and the European Commission then assess if this is really the case. A unanimous decision of euro zone finance ministers is the final go-ahead. The ECB pays out the money while the Commission acts as a coordinator of the bilateral loans.

(Reporting by Jan Strupczewski, editing by Maureen Bavdek)

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Factbox: Terms of euro zone emergency loans to Greece

April 12, 2010 By Leave a Comment

(Reuters) – Euro zone finance ministers agreed on Sunday to the terms of emergency loans for Greece, should the debt-stricken country be unable to finance itself on the market. Below are the key points of the agreement.

WHO WOULD LEND TO GREECE?

All countries using the euro and the International Monetary Fund. Euro zone member states would contribute to the loans according to their respective holdings in the European Central Bank capital. For a detailed breakdown see: (here)

BURDEN SHARING IN LOANS

The euro zone would provide two-thirds of all loans requested by Greece and the IMF would supply the remaining one-third.

LENGTH OF STAND-BY LOAN PROGRAM

Three years

THE AMOUNT

30 billion euros from the euro zone in the first year. The IMF could lend Greece up to 10-to-12 times its IMF quota of $1.25 billion, which would mean $12.5 billion to $15 billion (some 11.1 billion euros). A senior Greek finance ministry official said he would expect the IMF to lend Greece at least 10 billion euros in 2010. He also said that it would make sense if the whole three-year program was 80 billion euros.

INTEREST

For the euro zone, variable rate loans would be made on the basis of three-month EURIBOR rates, while fixed-rate loans will be based upon the rates corresponding to Euribor swap rates for the relevant maturities.

On top of that, there will be a charge of 300 basis points. An additional 100 basis points will be charged for loans longer than three years. In conformity with IMF charges, a one-timeservice fee of maximum 50 basis points will be charged to cover operational costs.

The statement said that for a three-year loan to Greece as of April 9, the interest would be “around five percent.”

The IMF prices its loans less, Economic and Monetary Affairs Commissioner Olli Rehn said.

HOW TO GET IT

Greece has to request the money, because it is unable to finance itself on the market. The ECB and the European Commission then assess if this is really the case. A unanimous decision of euro zone finance ministers is the final go-ahead. The ECB pays out the money while the Commission acts as a coordinator of the bilateral loans.

(Reporting by Jan Strupczewski, editing by Maureen Bavdek)

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Greek official: 80 bln euros “logical” aid amount for next 3 yrs

April 12, 2010 By Leave a Comment

ATHENS, Apr 11 (Reuters) – It would be logical that the EU/IMF aid for Greece amounts to some 80 billion euros ($107 billion) over the next three years if the mechanism is triggered, a senior finance ministry official said on Sunday.

Bonds

The senior offical said aid this year would amount to at least 30 billion euros from the euro zone and at least 10 billion from the IMF.

“40 billions for 2010 is part of a bigger amount for the three-year period. A logical amount for the three-year period would be double than 40 billion,” the official told reporters.

The official added: “We will monitor the markets in the coming days and, depending on how the spreads move, we will decide whether to request the aid mechanism.”

He reiterated that Greece still aimed at being able to raise money from markets. (Reporting by Lefteris Papadimas; Writing by Ingrid Melander; Editing by Mike Nesbit)

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Polish CPI seen at about 2.5 pct in March-official

March 2, 2010 By Leave a Comment

WARSAW, March 1 (Reuters) – Polish inflation may ease to about 2.5 percent year-on-year in March, a finance ministry official said on Monday.

“Inflation will continue to ease, also thanks to the statistical base effect and stable food prices, and near the central bank’s 2.5 percent target in March,” Slawomir Dudek, deputy director of the statistics and analysis department, said.

Earlier on Monday, the ministry estimated February inflation would ease to 3.0 percent from 3.6 percent in January. (Reporting by Pawel Sobczak, writing by Karolina Slowikowska; Editing by Susan Fenton)

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Pakistan got 970-mn dollars and not 3-bn dollars from US

September 17, 2009 By Leave a Comment

Islamabad, Sep 17 (ANI): The United States has provided 970 million dollars in aid to Pakistan since the PPP-led Government came to power and not three billion dollars as claimed by US Ambassador Anne Patterson, a Pakistani Finance Ministry official has said.

The statement of US Ambassador to Pakistan, Anne Patterson, about giving 3 billion dollars assistance to the Zardari Government even surprised the top economic managers of the country. They were completely clueless about the figure of 3 billion dollars floated by the US.

“Out of the total 970 million dollars funding, a major chunk of 550 to 600 million dollars was in shape of the Coalition Support Fund (CSF) as it was the money which was spent by Pakistan on military’s movement and it took several months for clearance from the US authorities,” The News quoted a a senior official of the Finance Ministry, as saying.

The US has provided less than one billion dollars to Pakistan since the PPP-led government came into power, he said.

The US provided 497 million dollars in shape of CSF in May 2009. Earlier, the US provided around 100 million dollars on the same head a couple of months back – at the end of last financial year.

Around 300 million dollars were provided through USAID during the last financial year. Recently, the US authorities provided over 100 million dollars for the internally displaced persons (IDPs) of the Malakand Division.

“The US ambassador should provide details of 3 billion dollars assistance given to Pakistan during the last one and a half years period,” the official said.

Official sources pointed out that Pakistan was bearing the borrowing cost owing to delays in payments from the US related to the CSF. (ANI)

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PRESS DIGEST-Indonesian Newspapers – April 21

April 23, 2009 By Leave a Comment

Following are some leading stories in the main Indonesian newspapers on April 21.

Reuters has not verified these stories and does not vouch for their accuracy. Telephone: Editorial: +62-21-384-6364. Fax: +62-21-344-8404 or Help Desk: +803-061-2124 (toll free).

- – - -

JAKARTA POST

- VOTE TABULATION CENTRE CLOSES WITH MILLIONS LEFT UNCOUNTED

The General Election Commission (KPU) closed its electronic vote tabulation centre with only 13 million out of around 170 million votes tabulated, promising to count the remainder at its office. Officials blamed vote scanning technology for the slow rate of counting and said a computer virus had corrupted files from at least one regional KPU office.

- ADB AND ASEAN TO FORM NEW CREDIT ENHANCEMENT FACILITY

The private sector will be able to access bond funds more cheaply from a new credit enhancement facility to be created by ASEAN plus 3 (Association of Southeast Asian Nations) and the Asian Development Bank (ADB). The Credit Guarantee Investment Mechanism will be managed by the ADB and will have a preliminary capital of $500 million, a finance ministry official said.

- CRUCIAL BILLS UNLIKELY TO BE PASSED: MP

Indonesia’s parliament is unlikely to meet a September deadline to vote on 39 important bills, including a proposal to extend the life of the corruption court, said a senior lawmaker from the PDI-P party.

- PAYRISE PROMISED FOR POLICE, MILITARY AND PUBLIC SERVANTS

Indonesia’s police, military and public servants will get a pay rise in 2010, National Development Planning Minister Paskah Suzetta said on Monday. Low pay is seen as a factor behind corruption in Indonesia’s civil and security services.

- ECONOMIC WOES FUEL DIVORCE RATE

Central Java’s religious court has experienced a 70 percent increase in the number of divorces since this time last year, said a court official, who blamed the economic crisis and widespread job losses for creating worsening marital discord.

- A MILLION HECTARES OF LAND SET ASIDE FOR SEAWEED PLANTATION

The South Sulawesi administration has set aside a million hectares of land along the coastline of Tomini and Tolo bays for a South Korean-funded seaweed plantation project.

- MITRA RAJASA MAY SHARE APEXINDO

Indonesia’s PT Mitra Rajasa Tbk (MIRA.JK) is negotiating with four unnamed companies – three from Europe and one Indonesian – about the possibility of sharing ownership of oil and gas company Apexindo Pratama Duta, which Mitra acquired last year.

- – - -

JAKARTA GLOBE

- SURVEY FINDS 87 PERCENT VOTERS BACK PRESIDENT

A new survey by Indonesia’s Strategic centre for Development and Policy Review, Puskaptis, found that 87 per cent of voters said they would support incumbent President Susilo Bambang Yudhoyono in the upcoming presidential election.

- – - -

KORAN TEMPO

- PARLIAMENT APPROVES BTN’S IPO PLAN

The House of Representatives approved PT Bank Tabungan Negara (BTN) privatisation plan this year and the bank is expected to gain up to 2 trillion rupiah ($186.7 million) funds from its initial public offering (IPO), chief director Iqbal Lantaro said.

- INDUSTRIAL OUTPUT FORECAST TO SLOW – MINISTRY

Indonesia’s industrial output growth this year is forecast to slow to between 2.5-3.4 percent amid the global financial downturn, general secretary at the Industry Ministry Agus Tjahajana said.

- – - -

INVESTOR DAILY – BUKIT ASAM EYES 100 PCT INCREASE PROFIT IN Q1

Indonesian coal miner PT Tambang Batubara Bukit Asam Tbk (PTBA.JK) expects net profit to jump by up to 100 percent in the first quarter to around 286.3 billion rupiah ($26.73 million) due to increasing sales volume and coal prices, corporate secretary Eko Budhiwijayanto said.

- – - -

BISNIS INDONESIA

- INDONESIA’S CEPU BLOCK TO RESUME IN JULY

Exxon Mobil Corp (XOM.N) said it expects to resume production at its Cepu block, one of Indonesia’s biggest oil finds in a decade, in July.

- TRADA MARITIME SEEKS 280 BILLION RUPIAH LOAN

Indonesian shipping firm PT Trada Maritime Tbk (TRAM.JK) plans to seek loans up to 280 billion rupiah ($26.14 million) to help fund the purchase of six tankers and dry bulk carriers worth 400 billion rupiah, Finance Director Danny De Mitta said.

- – - – ($1 = 10,710 rupiah)

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PRESS DIGEST-Indonesian Newspapers – April 21

April 23, 2009 By Leave a Comment

Following are some leading stories in the main Indonesian newspapers on April 21.

Reuters has not verified these stories and does not vouch for their accuracy. Telephone: Editorial: +62-21-384-6364. Fax: +62-21-344-8404 or Help Desk: +803-061-2124 (toll free).

- – - -

JAKARTA POST

- VOTE TABULATION CENTRE CLOSES WITH MILLIONS LEFT UNCOUNTED

The General Election Commission (KPU) closed its electronic vote tabulation centre with only 13 million out of around 170 million votes tabulated, promising to count the remainder at its office. Officials blamed vote scanning technology for the slow rate of counting and said a computer virus had corrupted files from at least one regional KPU office.

- ADB AND ASEAN TO FORM NEW CREDIT ENHANCEMENT FACILITY

The private sector will be able to access bond funds more cheaply from a new credit enhancement facility to be created by ASEAN plus 3 (Association of Southeast Asian Nations) and the Asian Development Bank (ADB). The Credit Guarantee Investment Mechanism will be managed by the ADB and will have a preliminary capital of $500 million, a finance ministry official said.

- CRUCIAL BILLS UNLIKELY TO BE PASSED: MP

Indonesia’s parliament is unlikely to meet a September deadline to vote on 39 important bills, including a proposal to extend the life of the corruption court, said a senior lawmaker from the PDI-P party.

- PAYRISE PROMISED FOR POLICE, MILITARY AND PUBLIC SERVANTS

Indonesia’s police, military and public servants will get a pay rise in 2010, National Development Planning Minister Paskah Suzetta said on Monday. Low pay is seen as a factor behind corruption in Indonesia’s civil and security services.

- ECONOMIC WOES FUEL DIVORCE RATE

Central Java’s religious court has experienced a 70 percent increase in the number of divorces since this time last year, said a court official, who blamed the economic crisis and widespread job losses for creating worsening marital discord.

- A MILLION HECTARES OF LAND SET ASIDE FOR SEAWEED PLANTATION

The South Sulawesi administration has set aside a million hectares of land along the coastline of Tomini and Tolo bays for a South Korean-funded seaweed plantation project.

- MITRA RAJASA MAY SHARE APEXINDO

Indonesia’s PT Mitra Rajasa Tbk (MIRA.JK) is negotiating with four unnamed companies – three from Europe and one Indonesian – about the possibility of sharing ownership of oil and gas company Apexindo Pratama Duta, which Mitra acquired last year.

- – - -

JAKARTA GLOBE

- SURVEY FINDS 87 PERCENT VOTERS BACK PRESIDENT

A new survey by Indonesia’s Strategic centre for Development and Policy Review, Puskaptis, found that 87 per cent of voters said they would support incumbent President Susilo Bambang Yudhoyono in the upcoming presidential election.

- – - -

KORAN TEMPO

- PARLIAMENT APPROVES BTN’S IPO PLAN

The House of Representatives approved PT Bank Tabungan Negara (BTN) privatisation plan this year and the bank is expected to gain up to 2 trillion rupiah ($186.7 million) funds from its initial public offering (IPO), chief director Iqbal Lantaro said.

- INDUSTRIAL OUTPUT FORECAST TO SLOW – MINISTRY

Indonesia’s industrial output growth this year is forecast to slow to between 2.5-3.4 percent amid the global financial downturn, general secretary at the Industry Ministry Agus Tjahajana said.

- – - -

INVESTOR DAILY – BUKIT ASAM EYES 100 PCT INCREASE PROFIT IN Q1

Indonesian coal miner PT Tambang Batubara Bukit Asam Tbk (PTBA.JK) expects net profit to jump by up to 100 percent in the first quarter to around 286.3 billion rupiah ($26.73 million) due to increasing sales volume and coal prices, corporate secretary Eko Budhiwijayanto said.

- – - -

BISNIS INDONESIA

- INDONESIA’S CEPU BLOCK TO RESUME IN JULY

Exxon Mobil Corp (XOM.N) said it expects to resume production at its Cepu block, one of Indonesia’s biggest oil finds in a decade, in July.

- TRADA MARITIME SEEKS 280 BILLION RUPIAH LOAN

Indonesian shipping firm PT Trada Maritime Tbk (TRAM.JK) plans to seek loans up to 280 billion rupiah ($26.14 million) to help fund the purchase of six tankers and dry bulk carriers worth 400 billion rupiah, Finance Director Danny De Mitta said.

- – - – ($1 = 10,710 rupiah)

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