RI's foreign debt tops $117 billion<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad revealed
\nyesterday that the country's foreign debt stood at US$117 billion
\nas of September, a 7.3 percent increase from $109.3 billion
\nrecorded in March.<\/p>\n
Mar'ie said in a written reply to questions by the House of
\nRepresentatives Commission VIII for state budget and finance that
\nthe government's debt decreased to $52.3 billion from $53.3
\nbillion.<\/p>\n
But private sector debt rose to $65 billion due to an increase
\nin investment activities.<\/p>\n
\"At the end of the current 1997\/1998 fiscal year (in March),
\nour total debt-to-service ratio (the ratio of foreign debt to
\nexport revenue) is expected to stand at 34.5 percent,\" Mar'ie
\nsaid.<\/p>\n
Initially, the government predicted the country's debt-to-
\nservice ratio would be 31.2 percent by the end of the fiscal
\nyear, with government debt accounting for 11.8 percent, private
\nsector 17.8 percent and state firms 1.6 percent.<\/p>\n
To reduce the debt-to-service ratio, Mar'ie said the
\ngovernment would impose stricter requirements on the private
\nsector's foreign loans and would step up efforts to increase
\nexports.<\/p>\n
\"To reduce the burden on our balance of payments, we need to
\ncurb private-sector borrowing,\" Mar'ie said.<\/p>\n
Meanwhile, the government would continue to adhere to prudent
\ndebt management by repaying foreign loans that carried high
\ninterest rates ahead of schedule.<\/p>\n
Mar'ie said most of the government's offshore loans were
\nprovided under either bilateral or multilateral arrangements,
\nwhich had long-term maturity and carried low interest rates.<\/p>\n
Of the government's outstanding debt, $20.63 billion was made
\nunder bilateral arrangements, carrying an average interest rate
\nof 2.6 percent.<\/p>\n
The other $16.01 billion was borrowed though multilateral
\ndeals, carrying an average interest rate of 7 percent annually.<\/p>\n
Another $14.5 billion in external loans was provided in the
\nform of credit exports, $9.96 million in commercial loans, $1.1
\nbillion in lease deals and the remaining $54,000 in bonds.<\/p>\n
Mar'ie said the sharp depreciation of the rupiah against the
\nU.S. dollar would increase the burden on the current state
\nbudget.<\/p>\n
He said every drop of Rp 100 against the dollar would increase
\nthe government's foreign debt servicing burden by Rp 500 billion
\n($145 million).<\/p>\n
\"Therefore, if the depreciation continues until the end of the
\ncurrent 1997\/1998 fiscal year, it will add to the burden of our
\nforeign debt servicing,\" Mar'ie said.<\/p>\n
The Indonesian rupiah has depreciated by about 35 percent
\nagainst the U.S. dollar since early July, from about 2,450 to
\n3,450 yesterday.<\/p>\n
He said that as of last June, 43.3 percent of Indonesia's
\noffshore loans were denominated in U.S. dollars, 39.5 percent in
\nJapanese yen and the remaining 17.2 percent in other currencies.<\/p>\n
\"The government will continue to pursue prudent foreign debt
\nmanagement so that foreign debt servicing will not adversely
\naffect our routine budget,\" Mar'ie said.<\/p>\n
He said the government had spent Rp 9.56 trillion in the first
\nhalf of this year to service its foreign debt.<\/p>\n
For the second half of the fiscal year, the government will
\nhave to earmark $4.7 billion to pay the principal and interest of
\nits external loans.<\/p>\n
During the second half, Mar'ie said, the government would
\nreceive some $3.4 billion in new loans within the framework of
\nthe Consultative Group on Indonesia. This does not include $6
\nbillion to be withdrawn from multilateral institutions under the
\nInternational Monetary Fund (IMF) bailout package.<\/p>\n
But funds from the IMF would mainly be used to support
\nIndonesia's real estate sector reform program and macroeconomic
\nadjustment.<\/p>\n
In addition to the IMF-led loan commitments, Mar'ie said, the
\ngovernment still maintained standby loans from several commercial
\nbanks totaling $2.04 billion to safeguard Indonesia's balance of
\npayments.<\/p>\n
Such standby loans were deemed necessary, considering capital
\ninflow was expected to drop significantly. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ris-foreign-debt-tops-117-billion-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}