Government Opens Opportunities To Prefund For 2025 This Year

SERANG - The Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance revealed that there is an opportunity to pre-fund or withdraw debt at the end of this year in the context of funding the 2025 State Budget. This funding will be used to meet spending needs early next year.

"We have an opportunistic debt withdrawal in terms of fulfilling this year, we can also pre-fund this year's debt issuance for financing next year," said Director of Strategy and Portfolio for Financing DJPPR Riko Amir in the media gathering of the Ministry of Finance 2024, Thursday, September 26.

According to Riko, this is based on the belief that the Indonesian economy will improve until the end of this year so that the government's yield or yield costs are expected to decrease.

Riko said that currently, the portion of debt with a foreign currency in debt against total outstanding debt has decreased, this condition indicates that the risk of debt due to foreign exchange fluctuations has decreased.

"In addition, we can prefund this year for next year, in order that our debt is either net or gross quite high next year," said Riko.

Riko emphasized that his party will maximize the remaining debt fulfillment at the end of the year before deciding on pre-funding policies.

"But in the fourth quarter, if we see an opportunity to increase debt within the framework of financing next year, we will do that," he said.

According to Riko, this action is allowed according to the rules in the APBN Law. However, in the issuance of pre-funding debt, it can only be done in the fourth quarter.

"The State Budget Law has adopted it in its articles, but it can only be published in the fourth quarter," he said.

Riko explained that next year the government will set a target for the issuance of new debt in the quarter by considering economic targets. Because the issuance of debt is flexible, it can be done by front loading (larger in front) or back loading (larger behind).

"But there is one more criterion, we have to pay for maturity financing. Those combinations make the calculation if in the issuance of the debt whether the front loading or back loading," he concluded.