Foreign Investors Attack SBN, Indonesia's Foreign Debt INCREASes IDR 35.5 Trillion In A Month

JAKARTA Bank Indonesia (BI) informed that Indonesia's foreign debt (ULN) position in November 2022 was US$392.6 billion or US$2.4 billion higher (Rp35.5 trillion) when compared to October 2022 which amounted to US$390.2 billion.

Head of the BI Communications Department Erwin Haryono said the position of external debt in November consisted of government debt (including central banks) of USD 181.6 billion and private debt USD 202.5 billion.

In detail, government debt increased from the previous month's 179.7 billion US dollars with the allocation of the health and social sector (24.5 percent), the education sector (16.5 percent), government administration (15.3 percent), the construction sector (14.2 percent), and financial services and insurance (11.5 percent).

"The development of the external debt is caused by positive sentiment in the trust of global market players which is maintained, encouraging foreign investors to re-place portfolio investment in the domestic Government Securities (SBN) market," he said in a press statement on Monday, January 16.

Erwin added, for private external debt, it slightly increased from the previous month's 202.2 billion. He said the development was caused by the growth of debt from financial institutions and non-financial institutions, which contracted by 2.0 percent and 0.7 percent year on year (yoy), respectively.

"Based on the sector, the largest private external debt comes from the financial and insurance services sector, electricity procurement, the manufacturing industry sector, and the mining sector with a share of 78.1 percent of total private external debt," he said.

Erwin revealed that the structure of Indonesia's external debt remains healthy, supported by the application of prudential principles in its management.

"Indonesia's external debt in November 2022 remains under control, as reflected in the ratio of Indonesia's external debt to Gross Domestic Product (GDP) which was maintained at around 29.7 percent, slightly increasing compared to the ratio in the previous month which was 29.5 percent," he added.

Meanwhile, the structure of Indonesia's external debt remains healthy, shown by Indonesia's external debt which is still dominated by long-term external debt, with a share of 87 percent.

He ensured that Bank Indonesia and the government would continue to strengthen coordination in monitoring the development of external debt, supported by the application of prudential principles in its management.

"The role of external debt will also continue to be optimized in supporting development financing and encouraging national economic recovery, by minimizing risks that can affect economic stability," Erwin concluded.