(Adds comment from fin ministry official, background)
By Eveline Danubrata and Hidayat Setiaji
JAKARTA, April 26 Indonesia's finance ministry
said on Wednesday it had re-appointed HSBC as a primary dealer
of government bonds following the bank's move to be locally
The appointment of PT Bank HSBC Indonesia was effective on
April 17, the ministry said in an emailed statement.
Last week, HSBC's branch in Indonesia was integrated with a
local entity previously known as PT Bank Ekonomi Raharja, in a
move that the bank said will expand its offerings and network in
the country. (bit.ly/2oIVyWC)
The new entity still fulfills the condition of being a
primary bond dealer after the integration, Loto Srinaita
Ginting, director of government bonds at the finance ministry,
told Reuters by phone.
A primary dealer is a bank or a securities firm appointed by
the finance minister that can buy government bonds in auctions
and resell them in the secondary market. Indonesia had 19 such
dealers as of Nov. 25.
There has been a growing push in Indonesia for foreign banks
to be locally incorporated. Some parliamentarians have said the
move is necessary to ring-fence capital in Indonesia,
particularly if there is a financial crisis.
Indonesia dropped JPMorgan as a primary bond dealer after
the U.S. bank in November published a research report on the
country that was considered negative by the government.
The finance ministry in January announced new rules
requiring all primary bond dealers to "safeguard" their
partnership with the government and avoid conflicts of interest.
(Reporting by Eveline Danubrata and Hidayat Setiaji; editing by