Posted on 24 Jul 2015
The country’s total foreign debt rose 5.9 percent to $302.3 billion in the January-May period, according to a report by Bank Indonesia on Wednesday. The growth was slower than the 7.7 percent pace in April.
Public foreign debt rose 1 percent to $133.5 billion in May, slower than the 1.5 percent pace of the previous month. The debt accounted for 44.2 percent of the country’s total foreign debt.
Meanwhile, private companies’ foreign debt also increased 10.2 percent to $168.7 billion, a slower pace compared to the 13.2 percent pace in a month earlier. Private sector debt accounted for 55.8 percent of the country’s total foreign debt.
According to the central bank, most of the debts are due in more than a year’s time, sparing the country from liquidity risk. The long-term external debt of the public sector reached $130.3 billion, or 97.6 percent of the total public sector external debt. The long-term external debt of the private sector stood at $126.4 billion, or 74.9 percent of the total private external debt.
Private sector foreign debt remains concentrated in the financial, manufacturing, mining and utility sectors.
Bank Indonesia said it considered external debt growth as “healthy”, but would closely monitor private companies, preventing them from taking on excessive amounts of foreign debt.
“[The monitoring] is aimed to make sure the role of external debt in supporting development financing without adding risks that may affect macroeconomic stability,” the central bank said in a statement on Wednesday.
Bank Indonesia has pushed local companies, including state-owned companies like PLN, Krakatau Steel, Pertamina and Garuda Indonesia, to hedge their foreign exchange liabilities to help mitigate the risks rupiah volatility. The rupiah has fallen 7.46 percent against the US dollar so far this year.
