Govvernment to reduce its borrowing in yen

Govvernment to reduce its borrowing in yen

JAKARTA (JP): The government will reduce the portion of
foreign aid in yen to lower the risks caused by fluctuations on
the foreign exchange market, an official says.

"It is imperative for the government to curb its borrowing,
especially in Japanese yen because the currency has been
appreciating against other major currencies, including the U.S.
dollar," Bank Indonesia's director for foreign exchange affairs,
Paul Sutopo said yesterday.

He said that the depreciation of the rupiah against the yen
has in fact made more burdens for Indonesia because the yen's
appreciation will cause an increase in the repayment of debt
principals and interest.

According to the Ministry of Finance, around 40 percent of the
government's foreign debt is in the Japanese currency.

Coordinating Minister for Economy and Finance Saleh Afiff said
recently that Indonesia's total offshore borrowing has reached
US$90 billion, including $54 billion owed by the government and
$36 billion by the private sector.

However, Sutopo was quoted by Antara news agency as saying
yesterday that the appreciation of the yen did not take the
government by surprise.

"We should not be so worried on the appreciation of the yen
because Bank Indonesia, the central bank, has so far assigned a
team, called the Assets and Liabilities Committee, to manage
assets and liabilities based in major foreign currencies," he
said.

"I expect that the committee will be able to minimize any
risks stemming from the appreciation of foreign currencies," he
added.(fhp)