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External debt up, driven by sukuk issuance
Indonesia’s external debt rose in February, driven by foreign capital inflows into the government’s sukuk (Islamic bonds), according to data from Bank Indonesia.
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The government recently tapped into global markets when it issued US$750 million in green sukuk with a 5.5-year maturity period and $1.25 billion worth of regular global sukuk with a 10-year tenure. (Shutterstock/File)
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ndonesia’s external debt rose in February, driven by foreign capital inflows into the government’s sukuk (Islamic bonds), according to data from Bank Indonesia (BI).
The country’s external debt, which includes government and private sector borrowing, increased 8.8 percent year-on-year (yoy) to US$388.7 billion in February. The government’s yoy borrowing growth in February outpaced the previous month’s 7.2 percent yoy growth.
The government and central bank’s borrowing recorded a 7.3 percent yoy growth in February to $190.8 billion. The growth was almost double the 3.9 percent yoy growth recorded in the previous month, driven by foreign capital inflows into the domestic bond market and coupled with the issuance of $2 billion in sukuk in February.
The Finance Ministry had issued a $750 million green global sukuk with 5.5 years maturity, as well as $1.25 billion in regular global sukuk with a 10-year maturity date in February, both of which are oversubscribed by 3.8 times.
Indonesia welcomed Rp 91 trillion worth of foreign capital year-to-date (ytd), Rp 75 trillion of which went to the sovereign bond market and the remainder was invested in the stock market, BI deputy governor Mirza Adityaswara said recently.
External borrowing from the private sector, which also includes that of state-owned enterprises (SOEs), was recorded at $1.3 billion in February, up by 10.8 percent yoy – relatively flat compared to the previous month’s yoy growth but it outpaced the growth of the government’s external debt over the same period.
Most of the private sector’s external debt was concentrated in four sectors, BI data revealed, namely financial and insurance services, manufacturing, electricity, gas and steam procurement and mining. The sectors grabbed a 74.2 percent market share of the private sector's total external debt.
