REPUBLIKA.CO.ID, JAKARTA -- Bank Indonesia (BI) will issue a money market regulation which will lay the foundation for banks and non-banking corporations to issue a variety of debt instruments as part of the efforts to boost the financial market.

The regulation will allow non-banking corporations to issue instruments, including commercial papers and medium-term notes which can be traded in the money market, BI Governor Agus Martowardojo said on the sidelines of the launch of a book, "Study of Financial System's Stability," here on Monday.

The regulation, which is being discussed, is likely to be issued at the end of August 2016, he disclosed.

"This is the long-awaited regulation that we need to issue. BI needs a regulation so that it becomes clear how to run the money market," he stated.

The central bank has encouraged state-owned companies to actively participate in absorbing funds by floating bonds in the money market.

According to BI data, by 2015, the number of banks and non-banking corporations issuing bonds was very small.

The issuance of bonds and other debt instruments is expected to accommodate billions of dollars of repatriated funds, once the tax amnesty bill is passed into law.

By 2015, the market value of corporate bonds in Indonesia stood at only 2.2 percent of the national gross domestic product. Ideally, the market value should be 17 percent of the GDP.

The corporate bonds issued in 2015 amounted to Rp52.9 trillion.

Indonesia is lagging far behind other ASEAN member states in terms of corporate bonds. The market value of bonds in the Philippines has reached 5.8 percent of the GDP, in Singapore it reached 32.4 percent, in Thailand 17.4 percent and in Myanmar, 41.5 percent of the GDP.

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