T

he Indonesian Export Financing Agency (LPEI), also known as Indonesia Eximbank, is to get an additional state capital injection amounting to Rp 3 trillion (US$211.56 million) from the Finance Ministry next year, an agency official has said.

The ministry has allocated Rp 1 trillion in capital injections to the wholly state-owned agency this year, with the funds to be disbursed soon. The LPEI will use the funds to expand its business by channeling more financing to exports. The weakened rupiah has boosted exports, signaled by the agency'€™s increased outstanding loans and financing.

'€œOur business as of August has grown by almost 30 percent and has exceeded our target for this year,'€ LPEI managing director Basuki Setyadjid said on Friday.

Last year, the LPEI set a target of a 20 to 22 percent increase in terms of assets and financing, and 18 to 20 percent growth in net profits.

With such targets, it is looking to post at least Rp 72 trillion in total assets, Rp 62.4 trillion in outstanding financing and Rp 1.18 trillion in net profits.

Basuki revealed that as of August, his agency had booked Rp 77.1 trillion in total assets, Rp 70.8 trillion in outstanding loans and financing and Rp 1.2 trillion in net profits. It also saw its net interest income (NII) jump 31 percent to Rp 1.7 trillion year-on-year (yoy), while its gross non-performing loan (NPL) ratio stood at 1.86 percent.

To support its expansion plan, Basuki added, the LPEI would also issue bonds worth Rp 2 trillion on Sept. 13 and was optimistic they would be oversubscribed.

LPEI accounting and EIS division head Agus Windiarto said that the expansion would include acquiring new debtors and providing finance for existing debtors to expand their businesses. The agency will also finance the export of railway coaches to Myanmar by state-owned train manufacturer INKA, worth around Rp 300 billion, through a National Interest Account (NIA).

The NIA is a government policy that, despite being commercially non-viable, may help boost exports.

According to Bloomberg data, the rupiah closed Friday trade at 14,172, slightly lower than its previous close at 14,170, a level unseen in 17 years. The currency has weakened around 14 percent so far this year against the dollar, making it the second-worst performer in the region after the Malaysian ringgit.

However, despite the rupiah'€™s desperate performance, the Central Statistics Agency (BPS) recorded that exports had dropped 19.2 percent to $11.40 billion yoy in July, while imports had dropped 28.44 percent to $10.07 billion in the same period. The country'€™s trade balance booked a $1.3 billion trade surplus, the widest since December 2013, although this was caused by a decline in imports rather than a rise in exports.

The LPEI, Basuki went on, had seen an increase in exports to Indonesia'€™s non-traditional markets, such as countries in Africa, Eastern Europe and Central Asia.

'€œThis is in line with the finance minister instruction to diversify exports markets,'€ he said.

Indonesia is seeing lower demands from its traditional export partners, such as China, Western European countries and the US, as the economies of those nations cool. (prm)