Indonesian Retail Bond, ORI022, is a retail Government Security (SBN) that is set to be launched on September 26, 2022. This retail bond is an effort from the government to achieve two things. The first is to fund the state budget for development, and the second is to make investing in bonds more affordable and accessible for the wider Indonesian society. With a relatively short tenor (3 years), and a minimum purchase amount starting at only IDR 1,000,000, this ORI series is suitable for novice investors or those who wish to obtain a steady income with relatively low risk. Also, because the government backs ORI022, this product can be considered quite safe and low risk.

So, what are the advantages of investing in ORI022?

Historically, the ORI22 coupon rate has been dependent on the reference interest rate or the BI-7 Day Reverse Repo Rate (BI7DRR). As seen from the ORI series that have been launched previously, the difference between the BI-7 Day Reverse Repo Rate and the coupon rate is usually around 2% on average. This means that if investors place their funds towards SBNs, and in this case the ORI series, they will receive more substantial gains as compared to investing in time deposits or other money market instruments.

As of today, September 22 2022, the government has set the ORI022 coupon at 5.95% per annum which is a fixed coupon, which means that coupon payments are made regularly (monthly in the case of the ORI022 series). This stable cash flow can be a benefit for investors who are looking for a steady source of income. Also, because ORI022 is a tradeable bond, investors will have the potential for capital gains. If the price of the security increases, investors can sell it to profit from the price difference.

That is all for the brief introduction to Indonesian Retail Bonds or ORI series 22.

If you are in the market for safe and guaranteed-by-state investment, might consider looking at the ORI022 as an option.

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