$9.6b in private debts to mature by March
$9.6b in private debts to mature by March
JAKARTA (JP): Bank Indonesia Governor J. Soedradjad Djiwandono
revealed yesterday that at least US$9.6 billion of the $65
billion in the private sector's foreign debts would mature by
March.
Speaking at a working session of the House of Representatives'
Commission VIII for state budget and finance, Soedradjad said the
amount covered principals and interest charges.
He reaffirmed that total private foreign debts as of September
totaled $65 billion.
"However, the concern in the market is how much of the debts
are short term, and more importantly, how much of them will
mature soon," Soedradjad said.
"In the current 1997/1998 fiscal year (ending in March), $9.6
billion will be needed to service those private foreign debts, "
he added.
He said the data on private offshore debts was based on
reports from commercial banks and other corporate borrowers, from
financial publications and a recent survey on custodian banks.
The governor reiterated that the government, with the help of
the International Monetary Fund (IMF), would continue to ensure
enough supply of dollars in the domestic market.
"By going to the IMF, we are convincing the market that we
have got the money. There will be enough dollars when they need
it," Soedradjad said.
The IMF has arranged a $23 billion financial package for
Indonesia to support its economic reforms to survive the current
currency turmoil plaguing the region.
Soedradjad said $3 billion out of the $23 billion could be
disbursed any time when the government needed it.
But Soedradjad did not explain how the central bank would
supply the dollars to the market, through the currency market or
through direct dollar loans to companies via commercial banks.
He only said that whenever the central bank entered the market
by selling dollars, its primary aim was to achieve long-term
stability in the rupiah.
"At what level? It's up to the market. As long as it (the
rupiah) is stable at a certain level for a long period of time,
we are happy with that. And the rupiah's long-term stability is
important for market players themselves," Soedradjad said.
Soedradjad yesterday called on the public to remain calm,
asking for their patience and support of the government efforts
to stabilize the rupiah and revive the economy.
He acknowledged that tight liquidity pressures had resulted in
the reduction of production operations and had even caused
layoffs in cash-starved businesses.
He cautioned, though, that given the current economic
hardship, liquidity could be eased only gradually. If done too
abruptly, it could undermine efforts to restore foreign
investors' confidence in the country's economy.
"Therefore, we ask for understanding and cooperation on the
part of the public," Soedradjad said.
He projected that growth for the second semester of this year
would slow down, and thus, overall growth for this year would be
lower than last year's 7.9 percent expansion.
Meanwhile, inflation would increase, while domestic
consumption would slow down significantly.
But, exports, especially non-oil exports, would rise as a
result of the weakening rupiah while imports would continue to
decline.
Indonesia's exports for the April to September period rose by
19.6 percent to $23.6 billion over the same period of last year.
"The economic downward trend will continue until next year,
but it is expected to begin picking up in the second semester of
next year.
"Our external position, especially the current account
deficit, is expected to improve, especially because of the
projected increase in exports and the curb of imports,"
Soedradjad said. (rid)
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