Hooray Indonesia's Foreign Debt Drops, But Unfortunately It's Still IDR 5,935 Trillion

JAKARTA - Bank Indonesia (BI) reported that Indonesia's foreign debt (ULN) position in January 2020 was US$413.6 billion or equivalent to IDR 5,935 trillion (APBN exchange rate of IDR 14,350).

Head of the BI Communications Department, Erwin Haryono, said that this amount decreased by around US$1.7 billion from the position in December 2021 which amounted to US$415.3 billion.

In his explanation, Erwin stated that the decline in foreign debt was contributed by the government (along with the central bank) and the private sector (including SOEs).

He said the decline in government external debt occurred in line with several series of SBN maturing in January 2022, including SBN denominated in US dollars. In terms of loans, a net decrease occurred in bilateral loans, in line with the repayment of loans to finance several infrastructure projects.

"As for the private sector, this is due to the repayment of foreign loans that are due during the January 2022 period", he said in a press statement, Tuesday, March 15.

In detail, the government's foreign debt in January 2022 was US$ 199.3 billion, lower than December 2021 which was US$ 200.2 billion.

Meanwhile, private external debt was recorded at US$205.3 billion in January 2022, down from US$206.1 billion in December 2021.

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

He also revealed that Indonesia's external debt remained under control at the beginning of the year as reflected in the ratio to gross domestic product (GDP) which was maintained at around 34.1 percent, or decreased in the previous month by 35.0 percent.

In addition, he claimed that external debt capacity was well maintained with the dominance of long-term debt which reached 88.2 percent of the total.

"To maintain a healthy external debt structure, Bank Indonesia and the government continue to strengthen coordination in monitoring the development of external debt, supported by the application of prudential principles in its management", he said.

"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.