$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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