Foreign debt repayment to reach $18.5b in 2003: BI

Foreign debt repayment to reach $18.5b in 2003: BI

Dow Jones, Jakarta

Indonesia foreign debt repayments this year are forecast to total US$18.5 billion, according to central bank statistics obtained by Dow Jones Newswires Wednesday.

The private sector will repay about $12.1 billion in principal and interest on its borrowings, while the government must repay about $6.4 billion, the central bank figures estimate.

Foreign debt repayments remain a weight on Indonesia's capital account. Dollar demand from Indonesian companies has prevented the rupiah from extending gains in recent months.

The figures are only a rough estimate to actual capital flows because of ongoing corporate debt restructuring deals and unofficial payments linked to smuggling and other illegal trade.

Still, the forecast total foreign debt repayment this year appears to be much lower than the $30.5 billion the central bank estimated for last year.

Total debt repayments overseas will total $5.9 billion between January and March, falling to $5.7 billion, $3.7 billion and $3.2 billion in the subsequent three quarters.

The rupiah was among the world's best performing currencies in 2002, rising about 16 percent due to renewed political stability under President Megawati Soekarnoputri after three years of turmoil.

A strong trade surplus has also helped underpin the rupiah's rise.

Despite falling foreign debt repayments, huge overseas borrowings remain a negative for the currency this year, analysts say.

Total government debt is about $130 billion, about 70 percent of gross domestic product, of which $70 billion is foreign debt.

Since the 1997-98 Asian financial crisis the government has asked foreign creditors to reschedule its debt repayments three times and might have to seek a new debt pact next year.

Following is a breakdown of the debt repayment schedule of foreign debt for 2003, according to central bank data: