scholarly journals Financing infrastructure using floating-interest-rate infrastructure bond

2021 ◽  
Vol 4 (2) ◽  
pp. 306
Author(s):  
Naoyuki Yoshino ◽  
Dina Azhgaliyeva ◽  
Ranjeeta Mishra
Keyword(s):  
Interest Rate ◽  
Spillover Effect ◽  
Early Period ◽  
Government Bond ◽  
Fixed Rate ◽  
User Charges ◽  
Tax Revenues ◽  
The Government ◽  
The Interest Rate ◽  
Transparency And Accountability

This paper proposes a floating-interest-rate infrastructure bond, where the interest of a government bond is paid to investors during the period of construction and the early period of operation. Unlike the usual government bond, which provides a fixed interest rate, the proposed floating-interest-rate infrastructure bond pays a floating interest, the rate of which depends on spillover tax revenues. Effective infrastructure projects have a positive effect on the economic growth of a region, known as the spillover effect. When user charges and the return from spillover tax revenues are below the fixed rate of the government bond, the interest rate will equal to the fixed rate of the government bond. In this case, investors in the infrastructure will receive interest on the government bond at the minimum rate. As the spillover effect of the infrastructure increases, the rate of return for infrastructure investment will become greater than the fixed rate of the government bond. The success of the floating-interest-rate infrastructure bond depends on the spillover effect and on transparency and accountability. Policy recommendations are provided in this paper on how to increase the spillover effect and improve transparency and accountability. 

scholarly journals The Long-Run Determinants of Indian Government Bond Yields

2019 ◽  
Vol 36 (1) ◽  
pp. 168-205 ◽  
Author(s):  
Tanweer Akram ◽  
Anupam Das
Keyword(s):  
Interest Rate ◽  
Government Bond ◽  
Bond Yields ◽  
Short Term ◽  
Indian Government ◽  
Bond Yield ◽  
Long Run ◽  
Key Driver ◽  
The Government

This paper investigates the long-term determinants of the nominal yields of Indian government bonds (IGBs). It examines whether John Maynard Keynes’ supposition that the short-term interest rate is the key driver of the long-term government bond yield holds over the long run, after controlling for key economic factors. It also appraises if the government fiscal variable has an adverse effect on government bond yields over the long run. The models estimated in this paper show that in India the short-term interest rate is the key driver of the long-term government bond yield over the long run. However, the government debt ratio does not have any discernible adverse effect on IGB yields over the long run. These findings will help policy makers to (i) use information on the current trend of the short-term interest rate and other key macro variables to form their long-term outlook about IGB yields, and (ii) understand the policy implications of the government's fiscal stance.

scholarly journals The Interest Rate Elasticity of Mortgage Demand: Evidence from Bunching at the Conforming Loan Limit

2017 ◽  
Vol 9 (1) ◽  
pp. 210-240 ◽  
Author(s):  
Anthony A. DeFusco ◽  
Andrew Paciorek
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Fixed Rate ◽  
Mortgage Debt ◽  
Percentage Point Increase ◽  
Fannie Mae ◽  
The Interest Rate ◽  
Loan Size ◽  
Loan Limit ◽  
Mortgage Demand

This paper provides novel estimates of the interest rate elasticity of mortgage demand by measuring the degree of bunching in response to a discrete jump in interest rates at the conforming loan limit—the maximum loan size eligible for purchase by Fannie Mae and Freddie Mac. The estimates indicate that a 1 percentage point increase in the rate on a 30-year fixed-rate mortgage reduces first mortgage demand by between 2 and 3 percent. One-third of this response is driven by borrowers who take out second mortgages, which implies that total mortgage debt only declines by 1.5 to 2 percent. (JEL D14, G21, R21, R31)

scholarly journals Model Pertumbuhan Utang Luar Negeri Indonesia

2018 ◽  
Author(s):  
Muhammad Subhan
Keyword(s):  
Interest Rate ◽  
Government Expenditure ◽  
External Debt ◽  
Tax Revenue ◽  
Literature Study ◽  
First Order ◽  
Expenditure Rate ◽  
The Government ◽  
Linear Differential ◽  
The Interest Rate

The Government of Indonesia do external debt because government expenditure is greater than his revenue. External debt of Indonesia increas every year. To see its growth, it can be done with make a model of Indonesia’s external debt. This research is literature study. The model of the growth of Indonesia’s external debt in form of linear differential equations of first order that the solution can be determined. From the analysis results, Indonesia’s external debt affected by the interest rate, the expenditure rate, the tax revenue rate and non-tax revenue rate.

scholarly journals Impact of Fiscal Deficit and Government Debt on Interest Rate in Pakistan

2019 ◽  
pp. 1-17
Author(s):  
Najia Shakir ◽  
Sami Ullah ◽  
Salim Ullah Khan ◽  
Muhammad Qasim
Keyword(s):  
Interest Rate ◽  
Money Supply ◽  
Government Debt ◽  
Gdp Per Capita ◽  
Fiscal Deficit ◽  
Per Capita ◽  
The Government ◽  
The Interest Rate ◽  
Relationship Of ◽  
The Relationship

The current study was conducted in the year 2014 in Pakistan to investigate the impact of fiscal deficit and government debt on the interest rate.  Data on selected macroeconomic variables like fiscal deficit, government debt, GDP per capita, money supply and volume of trade etc. from the year 1990 to 2012.  The study also has tried to find out that how the interest rate in the country is affected by the government debt and fiscal deficit. Augmented Dickey-Fuller test was run to address the stationary issue in the data, and then Ordinary Least Square (OLS) model test was run to check the relationship among the variables. Two models were set in the study. In the first model, the relationship of GDP per capita, money supply, total debt servicing and volume of trade showed a significant relationship with the fiscal deficit, while in the second model the relationship of inflation, fiscal deficit, money supply, government debt and public debt showed a significant relationship with the interest rate. Policy makers are advised to focus on the increase of DGP/Capita and export volume. In order to sustain the rate of inflation, the government may regulate the money supply and public borrowing.

scholarly journals Kredit Ketahanan Pangan dan Energi: Implementasi dan Persepsi oleh Petani Padi

2018 ◽  
Vol 15 (2) ◽  
pp. 99
Author(s):  
Iman Widhiyanto ◽  
Nunung Nuryartono ◽  
NFN Harianto ◽  
Hermanto Siregar
Keyword(s):  
Interest Rate ◽  
Agricultural Sector ◽  
Financial Education ◽  
Advanced Technology ◽  
Fiscal Policies ◽  
Market Rate ◽  
Lower Interest Rate ◽  
The Government ◽  
The Interest Rate ◽  
Farm Business

<p>Agricultural sector is the government’s priority through fiscal policies. One of the policies implemented is the interest rate subsidy for Food and Energy Security Credit Program (KKP-E). Some Banks had been appointed and in collaboration with the government to provide KKP-E. KKP-E program had lower interest rate than the market rate and it was expected that the farmers could access it. KKP-E was intended to meet the needs of agricultural equipment and farm inputs purchase. Since the program rolled out from 2008 to 2015, the implementation of KKP-E was below the credit limit. This study aimed to analyze the KKP-E implementation, farmers’ perspectives of KKP-E, and change from KKP-E to KUR (People’s Business Credit) for Agricultural Sector. Results of the study showed that KKP-E disbursement was relatively low. KKP-E distribution channels needed enhancement and the credit could not satisfy all farm business. Farmers did not receive KKP-E from the bank on time. Continuity of subsidized credit was important for farmers. Basic scheme of KKP-E program should be applied to KUR for Agricultural Sector. The government and the Banks need to be more actively in socializing the program, to improve financial education, to utilize more advanced technology, and to simplify bureaucracy.</p><p> </p><p>Abstrak</p><p>Pemerintah berusaha untuk membangun sektor pertanian melalui berbagai instrumen kebijakan fiskal. Salah satu kebijakan yang telah digulirkan adalah subsidi bunga Kredit Ketahanan Pangan dan Energi (KKP-E). Pemerintah bekerjasama dengan bank pelaksana menyediakan KKP-E. Petani diharapkan dapat mengakses KKP-E karena tingkat bunganya lebih rendah dari pasar. KKP-E digunakan untuk memenuhi kebutuhan pembelian peralatan pertanian dan input usaha taninya. Sejak digulirkan pada tahun 2008 sampai dengan 2015, realisasi penyaluran KKP-E masih jauh di bawah plafon kredit, dan realisasi subsidi bunga tidak efisien pada tahun-tahun awal digulirkannya subsidi bunga KKP-E. Penelitian ini bermaksud menganalisis secara diskriptif implementasi KKP-E, perspektif usaha tani terhadap KKP-E, dan perubahan KKP-E menjadi KUR (Kredit Usaha Rakyat) sektor pertanian. Data di lapangan menunjukkan bahwa jangkauan KKP-E masih rendah, saluran distribusi KKP-E perlu ditambah, terjadi fungibility penggunaan KKP-E, pinjaman KKP-E belum dapat memenuhi semua kebutuhan usaha tani, dan pencairan KKP-E masih lama dan tidak tepat waktu. Usaha tani menginginkan agar skim kredit dengan subsidi bunga dapat dilanjutkan di masa yang akan datang. Kemudahan-kemudahan yang ada pada KKP-E hendaknya diterapkan pada KUR sektor pertanian. Pemerintah bersama bank pelaksana perlu lebih masif melakukan sosialisasi dan edukasi keuangan dengan memanfaatkan teknologi yang lebih maju dan menyederhanakan birokrasi. </p>

scholarly journals VARIABEL MAKRO EKONOMI DAN NON PERFORMING LOAN: BUKTI EMPIRIS DARI BANK UMUM DI INDONESIA

2017 ◽  
Vol 2 (1) ◽  
pp. 1-14
Author(s):  
Amri Amri ◽  
Rahma Harianti
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Significant Influence ◽  
Commercial Banks ◽  
Multiple Regression Model ◽  
Economic Policies ◽  
Macroeconomic Variables ◽  
Corruption Perception ◽  
The Government ◽  
The Interest Rate

This study is aimed at empirically explores the effect of macroeconomic variables i.e., economic growth, interest rate and the Corruption Perception Index (CPI) on the Non-Performing Loans (NPL) of the commercial banks in Indonesia. An annually data from the years 2003 to 2014 were analysed using the multiple regression model. The study documented that: (i) the economic growth has insignificant effect on the Non-Performing Loans (NPL); (ii) the CPI has a negative significant influence on the Non-Performing Loans; and (iii) the interest rate has a positive significant influence on the Non -Performing Loans (NPL). This findings implied that the central bank of Indonesia (Bank Indonesia) and the government should design together the economic policies and regulations that could prevent increasing in the Non-Performing Loans (NPL) of the commercial banks in the country.Penelitian ini bertujuan untuk mengeksplorasi pengaruh variabel makroekonomi yaitu pertumbuhan ekonomi, tingkat suku bunga dan Indeks Persepsi Korupsi (CPI) terhadapkredit macet (NPL) bank- bank komersial di Indonesia. Data yang digunakan adalah tahunan dari tahun 2003-2014 yang dianalisis menggunakan model regresi berganda. Hasil studi ini menunjukkan bahwa: (i) pertumbuhan ekonomi tidak memiliki pengaruh signifikan pada Kredit Macet; (ii) CPI memiliki pengaruh signifikan negatif pada Kredit Macet; dan (iii) tingkat suku bunga memiliki pengaruh signifikan positif terhadap Kredit Macet. Temuan ini menyiratkan bahwa bank sentral (Bank Indonesia) dan pemerintah harus merancang bersama-sama kebijakan ekonomi dan peraturan yang bisa mencegah peningkatan kredit macet bank-bank komersial di Indonesia.

The “black box” of the interest rate channel of monetary policy

2020 ◽  
pp. 5-21
Author(s):  
S. R. Moiseev
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Open Economy ◽  
Small Open Economy ◽  
Financial Sector ◽  
General Terms ◽  
The Government ◽  
The Interest Rate ◽  
Interest Rate Channel

In the economic literature authors believe that central banks manage long-term interest rates on loans through the short-term money market interest rate in order to maintain price stability and balanced economic growth. However, macroeconomic theory tells extremely sparingly about the interest rate channel of monetary policy. In general terms, it conducts changes through a term premium and expectations in the government securities market. In applied research, economists only observe the final reaction of lending rates to the non-financial sector. Economists traditionally believe that the interest rate channel requires a developed financial sector. In some cases, in particular, at zero rates or in a small open economy that depends on the exchange rate, the interest rate channel works poorly. However, its effectiveness can be maintained without developed financial markets. The answer is the pricing of banking loans.

scholarly journals Analisis Pengaruh Likuiditas, Faktor Fundamental Ekonomi Makro Dan Faktor Eksternal Terhadap Imbal Hasil Surat Utang Negara (Seri FR0031)

2019 ◽  
Vol 2 (1) ◽  
pp. 46
Author(s):  
Deandra Aulia
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Sovereign Debt ◽  
Secondary Data ◽  
Debt Management ◽  
Short Term ◽  
Fixed Rate ◽  
Negative Effect ◽  
The Government

The government reopened the series FR0031 sovereign debt at the beginning of January 2010 through the Bank Indonesia auction system. The offered interest rate same as the beginning when the government issued FR0031 series debt securities, fixed rate of 11% but over time yield or yield in the form of coupons received by investors are fluctuating.               The aims of this research is to analyze the short term and long term influence of liquidity, interest rate, inflation, GDP, and exchange rate to imbal hasil National Bond (SUN) in the year of 2010 – 2017. This research using quarterly data of 2010 – 2017 for each variable. Data in this study is secondary data time series which provide by Bloomberg, Bank Indonesia, BPS and publication of Directorate General of Debt Management. The methode which used in this research is Error Correction Model. The result shows that variable inflation, GDP and exchange rate significantly positive effect in otherhand liquidity and interset rate significantly negative effect on Imbal hasil Curve SUN in long term. Judging by the value of the R square was 0.906314 it means 90.63% of imbal hasil explainable by independent variables used in this research the rest 9.37% explained by other factors. Based on the regression results there is no variable that significant in the short term with R square of 0.341939 which means the independent variable is able to explain 34.19% and 65.81% variation of the dependent variable

scholarly journals Perhitungan Iuran Normal Program Pensiun dengan Asumsi Suku Bunga Mengikuti Model Vasicek

2017 ◽  
Vol 7 (2) ◽  
pp. 85
Author(s):  
I Nyoman Widana ◽  
Ni Made Asih
Keyword(s):  
Interest Rate ◽  
National Development ◽  
Secondary Data ◽  
Pension Plan ◽  
Vasicek Model ◽  
Pension Program ◽  
The Government ◽  
The Interest Rate ◽  
Constant Interest Rate ◽  
Constant Interest

Labor has a very important role for national development. One way to optimize their productivity is to guarantee a certainty to earn income after retirement. Therefore the government and the private sector must have a program that can ensure the sustainability of this financial support. One option is a pension plan. The purpose of this study is to calculate the  normal cost  with the interest rate assumed to follow the Vasicek model and analyze the normal contribution of the pension program participants. Vasicek model is used to match with  the actual conditions. The method used in this research is the Projected Unit Credit Method and the Entry Age Normal method. The data source of this research is lecturers of FMIPA Unud. In addition, secondary data is also used in the form of the interest  rate of Bank Indonesia for the period of January 2006-December 2015. The results of this study indicate that  the older the age of the participants, when starting the pension program, the greater the first year normal cost  and the smaller the benefit which he or she  will get. Then, normal cost with constant interest rate  greater than normal cost with Vasicek interest rate. This occurs because the Vasicek model predicts interest between 4.8879%, up to 6.8384%. While constant interest is only 4.25%.  In addition, using normal cost that proportional to salary, it is found that the older the age of the participants the greater the proportion of the salary for normal cost.

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