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)