The Policy on Use of Debt Instruments to Cover Deficit inIndonesian State Budget Law

This article discusses Government Bonds, which are generally better known as Government Bonds (Surat Utang Negara/SUN). SUN is an instrument used to cover the deficit of the State Budget (Anggaran Pendapatan dan Belanja Negara/APBN). Debt can be in the form of foreign debt or domestic debt. In its implementation, domestic debt is preferred because it has a smaller risk. Dependence on SUN has caused nominal SUN to rise steadily, which if not managed properly can lead to a financial crisis. A strategy is needed to anticipate, namely the first to reduce the debt stock of the State that will be due by way of cash repurchase (cash buy back) SUN before maturity, debt swiching (exchange) of old bonds with new ones, and price discovery or determination of value fairmarket. Besides it, in the short term it is also necessary to anticipated if any oversold (SUN issued is not sold / not absorbed by the market) by finding cash loans through banks. In the long term, it would be better to replace the budget deficit regime with a balanced budget regime so that the State is truly independent in the welfare of its people. Besides continuing to eradicate corruption.