Indonesias External Debt Down to $406.3 Billion in May 2022: BI

Indonesias External Debt Down to 6.3 Billion in May 2022: BI

Jakarta: Indonesia continued recording a lower external debt position in May 2022, Bank Indonesia (BI) has announced.
At the end of May 2022, the position of external debt in Indonesia stood at USD406.3 billion, down from USD410.1 billion one month earlier.  
The latest developments stemmed from lower debt positions recorded in the public sector (Government and Central Bank) and private sector.  

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Annually, therefore, the position of external debt experienced a deeper 2.6% (yoy) contraction in the reporting period after declining 2.0% (yoy) the month earlier.
“Government external debt maintained a consistent downward trend in May 2022,” BI Communication Department Head Erwin Haryono said in a media release on Friday. 
The position of government external debt decreased to USD188.2 billion in the reporting period from USD190.5 billion in April 2022.  
Annually, government external debt contracted 7.5% (yoy) in May 2022, deeper than the 7.3% (yoy) decline recorded in April 2022.  
The lower position of external debt was consistent with several series of government securities (SBN) maturing in May 2022, coupled with the impact of global sentiment that prompted a rebalancing of portfolio investment in domestic SBN by non-resident investors.  
Meanwhile, foreign loans experienced a moderate uptick compared to the previous month, dominated by bilateral loans from several partner organisations to support priority program and project funding.  
The current position of government external debt is considered safe and manageable in terms of short-term financing risk, considering that 99.8% is dominated by long-term maturities.
“Private external debt decreased compared to the previous month,” he added. 
The position of private external debt in May 2022 reduced to USD209.4 billion from USD210.9 billion in April 2022.  
Annually, private external debt contracted 0.7% (yoy) in the reporting period after expanding 0.3% (yoy) one month earlier.  
The decline was spurred by a 0.9% (yoy) contraction of external debt at non-financial corporations after increasing 0.8% (yoy) in April 2022, dominated by loan repayments and maturing debt securities.  
On the other hand, external debt at financial corporations reversed the previous 1.9% (yoy) contraction to grow 0.3% (yoy) in the reporting period.  
By sector, the main contributors to private external debt in May 2022 were insurance and financial services, electricity, gas, steam and air conditioning supply, mining and drilling as well as the manufacturing industry, accounting for 77.3% of total private external debt.  
Furthermore, 74.4% of total private external debt was dominated by long-term tenors.

Structure of External Debt

“The structure of external debt in Indonesia remains sound, supported by prudential management,” he stressed.
External debt in Indonesia was still manageable in May 2022, as reflected by a decrease in the ratio of external debt to gross domestic product (GDP) from 32.6% in April 2022 to 32.3% in the reporting period.  
In addition, external debt in Indonesia remains sound, dominated by long-term debt that accounted for 86.7% of total external debt in May 2022.  
“Seeking to maintain a healthy structure, Bank Indonesia and the Government continued to strengthen coordination in terms of monitoring external debt, supported by the application of prudential principles, while optimising the role of external debt to support development financing and accelerate the national economic recovery, as well as minimise the risks that could impact economic stability,” he concluded.


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