Foreign Debt Increases Rp38 Trillion In A Month, Bank Indonesia: Staying Healthy Supported By The Implementation Of Prudential Principles

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) reported that until the end of February 2022, Indonesia's external debt (ULN) reached 416.3 billion US dollars or equivalent to Rp. 5,973 trillion.

The book jumped by 2.7 billion US dollars, or around Rp. 38 trillion, from the record at the end of January 2022 which amounted to 413.6 billion US dollars or Rp. 5,935 trillion.

The nick also raised the ratio of Indonesia's external debt to gross domestic product (GDP) to 34.2 percent from the previous 34.0 percent.

Head of the BI Communications Department Erwin Haryono explained that Indonesia's external debt remained under control, as indicated by the dominance of long-term tenors with a share of 87.8 percent of total external debt.

"The structure of Indonesia's external debt remains healthy, supported by the application of prudential principles in management," he said in a press statement on Thursday, April 14.

According to Erwin, Indonesia's external debt growth in February contracted by 1.5 percent year on year (yoy), continuing the contraction in the previous month which was 1.6 percent yoy.

In detail, he explained that Indonesia's external debt contributed by the government (including the central bank) amounted to 201.1 billion US dollars and private debt 206.3 billion US dollars.

It was stated that the development of the government's external debt was influenced by the net withdrawal of foreign loans used to support infrastructure financing as well as programs to increase competitiveness, industrial modernization, and accelerate trade.

"The government's external debt withdrawal in February 2022 is still prioritized to support priority spending, including efforts to deal with COVID-19 and the National Economic Recovery (PEN) program," he said.

Meanwhile, private external debt contracted deeper by 2.0 percent yoy compared to 0.8 percent in the previous period.

Meanwhile, by sector, the largest private external debt comes from financial services and insurance, electricity, gas, manufacturing, mining and quarrying, with a share of 77 percent of the total.

“Bank Indonesia and the government continue to strengthen coordination in monitoring the development of external debt, supported by the application of prudential principles in their 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," concluded Erwin.