TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Indonesia’s foreign debt at safe level: BI
Change Size
A pedestrian passes the Bank Indonesia building in Jakarta. (*/TRIBUNNEWS)
B
ank Indonesia (BI) Governor Agus Martowardjojo said on Wednesday that the country’s foreign debt remained at a safe level, as long-term loans dominated obligations.
According to BI data, long-term debt reached US$277.9 billion at the end of March, 88 percent of the total foreign debt of $316 billion. The value of long-term loans grew by 7.9 percent year-on-year (yoy), slower than the annual increase of 9.2 percent booked in the previous quarter.
Short-term foreign debt, meanwhile, fell by 8.4 percent yoy to $38.1 billion. That compares to an annual decrease of 13.7 percent recorded in the fourth quarter of last year.
Agus said private-sector short-term loans from non-affiliated creditors were the most sensitive but made up just 5 percent of the total loans as of March.
“So, Indonesia’s foreign debt is generally well managed and controlled," he asserted on the sidelines of the Islamic Development Bank’s 41st Annual Meeting in Jakarta.
Total foreign debt grew by 5.7 percent yoy and was equivalent to 36.5 percent of the country’s gross domestic product (GDP), similar to the 36 percent of GDP seen in the previous quarter.
BI data also reveal that private-sector debt amounted to $164.7 billion, or 52 percent of the total debt value, as of March and was dominated by loans from the finance, manufacturing, mining and electricity, gas and clean water sectors, while government and the central bank loans amounted to $151.3 billion. Private-sector loans fell by 1 percent yoy after rising 2.3 percent yoy in the previous quarter.
“It’s a positive step to see private-sector loans decrease,” DBS Bank economist Gundy Cahyadi wrote in an email to The Jakarta Post on Wednesday.
BI’s policy objective in the last two years had been to put the brakes on loan growth, so that companies were not over-leveraged, he said, adding that lower short-term foreign debt was also good for the country.
“That is because, in the event of capital outflows, the market’s focus will be on whether our foreign exchange reserves can plug the outflows,” he said.
The ratio of short-term loans to foreign exchange reserves fell to 35.5 percent as of March versus 36.7 percent at the end of last year, BI data show. (dan)
