Govt's foreign debts fall to $57.22 billion
Govt's foreign debts fall to $57.22 billion
JAKARTA (JP): Minister of Finance Mar'ie Muhammad revealed
yesterday the government's foreign debt had fallen to US$57.22
billion at the end of September from $59.59 billion at the end of
last year.
Mar'ie reported to the House of Representatives' Budgetary
Commission that the foreign debt reduction was caused mainly by
the Japanese yen's depreciation against the U.S. dollar and by
early repayments of high-interest debt.
"The recent depreciation of the Japanese yen against the U.S.
greenback has reduced the government's foreign debt exposure,"
Mar'ie reported.
The minister said the country's yen-denominated offshore debt,
which accounts for about 40 percent of its total foreign debt,
fell to US$22.4 billion in September from $24.03 billion in
December 1995.
The dollar was worth about 100 yen last December after dipping
to its lowest level, about 80 yen, several months before. The
dollar has continued to recover, and was worth 112 yen yesterday.
Mar'ie said Indonesia's debt service ratio, the ratio of
foreign debt servicing to export revenue, for the first nine
months of this year was 34.8 percent, of which the government's
debt contributed 16.3 percent and private debt 18.5 percent.
An acceptable debt service ratio for a developing country is
no more than 25 percent, according to the World Bank.
Mar'ie did not disclose the value of private foreign debt. He
only said the government would continue to monitor inflows of
private loans.
"Considering that Indonesia follows a free foreign exchange
regime, private borrowings by non-bank enterprises are not
regulated or restricted," Mar'ie said.
In its efforts to monitor private borrowing, the government
requires that private companies raising loans overseas must
report them to the Minister of Finance or the central bank.
"The private sector's willingness to report their commercial
offshore borrowings to the government has been increasing
although not all private enterprises report their borrowings,"
Mar'ie said.
To reduce Indonesia's debt service ratio, Mar'ie said the
government would continue to encourage exports and make early
repayments on high-interest debt.
Mar'ie revealed Monday the government last month paid $540.46
million of its high-interest debt to multilateral agencies ahead
of schedule and would soon amortize another $50.58 million.
If the government makes these early repayments, it will have
paid $2.82 billion of its foreign debt early by the end of the
current fiscal year, he said.
The government repaid its high-interest loans with proceeds
from the sale of government shares in state-owned companies and
from budget surpluses.
"Like in the current 1996/1997 budget, the government will
also prepay some of its debts in the 1997/1998 budget using,
among other things, budget surpluses," Mar'ie said. (rid)