"On a yearly basis, Indonesia`s foreign debts at the end of the fourth quarter of 2018 grew 6.9 percent (yoy) compared to 4.2 percent at the end of the third quarter of 2018 (yoy). The increase was a result of the growth of the government`s foreign debts and the private sector`s foreign debts," BI said in its statistics of Indonesia`s foreign debts as of the late fourth quarter of 2018 on Friday.
The foreign debts comprised $186.2 billion incurred by the government and the central bank and $190.6 billion incurred by the private sector, including state-owned companies. Compared to the third quarter of 2018, the foreign debts rose $17.7 billion.
The government`s foreign debts at the end of the fourth quarter of 2018 increased $7.1 billion compared to a quarter earlier due to the inflow of foreign investors` funds in the domestic market of state securities (SBN) along with a conducive domestic economy and interesting yields, according to BI.
The inflow of foreign capital to Indonesia was also triggered by the easing uncertainty over the global money market.
In addition, the increase in foreign debts also resulted from the issuance of foreign currency-denominated state securities for the pre-funding of the government`s fiscal instruments for 2019.
On a yearly basis, the government`s foreign debts at the end of the fourth quarter of 2018 grew 3.3 percent yoy.
Meanwhile, the private sector`s foreign debts at the end of the fourth quarter of 2018 rose $10.6 billion compared to the previous quarter.
BI attributed the increase in the private sector`s foreign debts to the rising number of foreign investors buying corporate bonds.
"The private sector`s foreign debts are mostly incurred by the financial service and insurance sector, the manufacturing industry sector, the electricity, gas and steam/hot water (LGA) sector and the mining and extraction sector," BI said.
After all, BI saw the structure of the country`s foreign debts was quite controllable as reflected by its ratio of foreign debts to gross domestic product (GDP), which reached 36 percent at the end of December 2018.
According to BI, the ratio is still within the average range of countries, which have the same economic capacity as Indonesia (peer countries).
Moreover, the structure of the foreign debts is dominated by long-term foreign debts, which make up 86.3 percent of the overall foreign debts.
Reporting by Indra Arief Pribadi
Editing by Suharto