Tuesday, 21 May 2019 | 03:25 WIB

Indonesia’s Foreign Debt Rises to IDR5,366 Trillion in January

Indonesia's Foreign Debt Rises to IDR5,366 Trillion in January (devisa)

JAKARTA NNC - Bank Indonesia (BI) noted that the position of Indonesia's foreign debt at the end of January 2019 reaches USD383.3 billion or around IDR5,366.2 trillion (exchange rate of IDR14,000/USD). The figure consists of government and central bank debt of USD190.2 billion and private debt including state-owned enterprises amounting to USD193.1 billion.

BI said foreign debt remained under control with a healthy structure. The external debt position increased by USD5.5 billion compared to the position at the end of the previous period due to net foreign debt withdrawal transactions and the effect of the strengthening of the rupiah exchange rate against the US dollar so that the debt in rupiahs held by foreign investors was higher in US dollars.

"In annual terms, Indonesia's external debt in January 2019 grew 7.2% (yoy), relatively stable compared to the previous period," BI said in an official statement on Friday (03/15/2019).

Relatively stable external debt growth was claimed in line with the increase in growth in government external debt amid a slowdown in the growth of private external debt.

Government external debt increased slightly in January 2019. The position of government external debt in January 2019 was USD187.2 billion or grew 3.7% (yoy), up from 3.1% (yoy) in the previous month. The external debt growth was mainly influenced by inflows of foreign investor funds in the domestic SBN market during January 2019, which showed an increase in foreign investor confidence in the Indonesian economy.

"The increase in the government's external debt position provides a greater opportunity for the government to finance state expenditure and government investment," BI said.

Priority sectors financed through government external debt include the health services and social activities sectors, the construction sector, the education services sector, the mandatory administration, defense and social security sectors, and the financial and insurance services sectors.

Private external debt experienced a slowdown in January 2019. The position of private external debt increased by USD1.5 billion or grew 10.8% (yoy), slowing compared to the previous month's growth of 11.5% (yoy). The slowdown was mainly due to the slowing down of manufacturing sector external debt and the financial and insurance services sector.

Meanwhile, the growth of external debt in the mining sector and the procurement of electricity, gas, steam / hot water (LGA) sector increased compared to the previous month's growth. The share of external debt in the four sectors to total private external debt reached 74.1%.

Meanwhile, the soundness of Indonesia's external debt structure is reflected, among others, from the ratio of Indonesia's external debt to gross domestic product (GDP) at the end of January 2019 which remained stable at around 36%. "The ratio is still within the range of peers," BI said.

In addition, the structure of Indonesia's external debt remained dominated by long-term external debt which had a share of 86.2% of total external debt. Bank Indonesia and the Government continue to coordinate to monitor the development of external debt and optimize its role in supporting development financing, by minimizing risks that can affect economic stability.s