BI Records Foreign Debt Position April 2024 Down To 189.1 Billion US Dollars

JAKARTA - Bank Indonesia (BI) noted that the government's Foreign Debt (ULN) position in April 2024 was recorded at 189.1 billion US dollars, or down when compared to the position in March 2024 of 192.2 billion US dollars.

Assistant Governor, Bank Indonesia Erwin Haryono assessed that the government's external debt continued its downward trend. On an annual basis, the government's external debt contracted growth by 2.6 percent (yoy), deeper than the contraction of 0.9 percent (yoy) in the previous month.

"The decline in the position of government external debt is mainly influenced by the adjustment of the placement of non-resident investor funds in domestic Government Securities (SBN) to other investment instruments in line with the increasing uncertainty in the global financial market," he explained in his statement, Friday, June 14.

Erwin said that the government is committed to maintaining credibility by fulfilling the obligations of principal payments and interest on time, as well as managing external debt flexibly and opportunistically in the aspects of timing, tenor, currency, and instruments to obtain the most efficient and optimal financing.

As one of the components in the State Budget financing instrument, he continued, the use of external debt continues to be directed to support priority sector financing.

The priority sector, which includes the Health Services and Social Activities Sector, is 20.9 percent of the total government external debt, Government Administration, Defense, and Social Security, which is mandatory at around 18.6 percent, Education Services at 16.8 percent, Construction at 13.6 percent and Financial Services and Insurance at around 9.6 percent.

"The government's external debt position is relatively safe and under control considering that almost all external debt has a long-term tenor with a share of 99.98 percent of the total government's external debt," he explained.

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

This is reflected in the ratio of Indonesia's external debt to Gross Domestic Product (GDP) which fell to 29.1 percent in April 2024 from 29.3 percent in March 2024, and was dominated by long-term external debt with a share of 87.1 percent of total external debt.

"In order to keep the external debt structure healthy, Bank Indonesia and the Government continue to strengthen coordination in monitoring the development of external debt," he said.

Erwin said that the role of external debt will also continue to be optimized to support development financing and encourage sustainable national economic growth.

"This effort is carried out by minimizing risks that can affect economic stability," he concluded.