Private sector foreign debt to reach $9.2b<\/p>\n
JAKARTA (JP): The private sector foreign debt falling due in
\nthe fourth quarter of this year is estimated to reach more than
\nUS$9.2 billion, according to a senior official at Bank Indonesia.<\/p>\n
Bank Indonesia's director for foreign affairs Nana Supriana
\nsaid Wednesday that this was comprised of $8.7 billion owed by
\nnon-banking sector firms, and $480 million owed by the banking
\nsector.<\/p>\n
But Nana said that the maturity of such a huge amount of debt
\nduring the period between October and December would not cause a
\nsharp increase in demand for the American greenback because the
\ngreater part of the debt was owed by subsidiaries of foreign
\ncompanies.<\/p>\n
Speaking at a media briefing, he explained that more than 50
\npercent of the debt owed by non-bank firms was owed by foreign
\ninvestment firms or subsidiaries of multinationals whose dollar
\nneeds would be supplied by their overseas parent companies.<\/p>\n
He also said that the central bank was still studying the
\npotential dollar demand from local non-bank firms.<\/p>\n
But he said that based on previous experience, firms were
\nusually already prepared in respect of their foreign exchange
\nneeds.<\/p>\n
\"So, let's hope that this will not have too much impact on
\ndollar demand,\" Nana said.<\/p>\n
Nana stated that the country's private sector foreign debt
\ntotaled $68.2 billion.<\/p>\n
He said that this comprised $10.1 billion owed by banks, $28.2
\nbillion by non-bank foreign investment firms, $5.2 billion by
\nstate enterprises, and the remainder by local non-bank firms.<\/p>\n
He also said that some $6.8 billion owed by non-bank firms and
\n$1.1 billion owed by the banking sector was to fall due in the
\nthird quarter of this year.<\/p>\n
Analysts have expressed fears that the surge in matured debts
\nin the fourth quarter could result in more pressure on the
\nalready weak rupiah.<\/p>\n
The rupiah ended lower at Rp 8,820 per U.S. dollar late on
\nWednesday compared to 8,730 on Tuesday.<\/p>\n
One of the factors affecting the rupiah exchange rate is the
\nsize of dollar demand including that from companies trying to
\nrepay their foreign debt.<\/p>\n
In other comments, Nana denied news reports that companies,
\nbanks, and individuals were no longer required to report to the
\ncentral bank about their foreign debt deals following the recent
\nscrapping by President Abdurrahman Wahid of the 1998 presidential
\ndecree governing the obligation.<\/p>\n
Nana said that the decree was rescinded because Bank Indonesia
\nhad been equipped with a new central bank law since last year,
\nunder which one of the responsibilities of the bank was to
\nmonitor foreign exchange flows into the country.<\/p>\n
He said that the presidential decree on the requirement for
\nlocal businesses to report to the central bank on their foreign
\ndebt transactions would be replaced by a Bank Indonesia
\nregulation which was now being finalized.(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/private-sector-foreign-debt-to-reach-92b-1447893297",
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