Private foreign debt concerns

Private foreign debt concerns

Our monetary authority appears to be concerned with our
swelling private foreign loan burden. Particularly disconcerting
is the boldness with which some members of the private sector
borrow money, daring to accept loans on the most preposterous
terms.

The rush to seek foreign loans is closely related to high
domestic interest rates and the overall economic situation.
Presently, the interest rate of the rupiah is said to be the
highest in the world, which drives people to do their borrowing
overseas. It is possible that the money is being used to finance
projects, but some of the loans are sought to capitalize on the
disparity between the interest rate of the rupiah and that of the
dollar.

We are convinced that not all of our private businesspeople
are this reckless or interested solely in momentary profits. Many
are genuine professionals. Nevertheless, the act of borrowing
abroad is enough to affect the balance of our transactions in
services. What's more, attempts to capitalize on interest rate
disparities will keep our monetary authorities unnecessarily
busy.

-- Bisnis Indonesia, Jakarta