The foreign debts rose 5.0 percent year-on-year (yoy) compared to 0.6 percent yoy in the previous quarter as a result of net loan withdrawal by the government and private sector, Executive Director of Bank Indonesia Communication Department Onny Widjanarko said here on Friday.
In addition, the appreciation of the rupiah's exchange rate against the US dollar also contributed to an increase in rupiah-denominated foreign debts, he said.
The government's foreign debts rose 2.1 percent yoy in the second quarter to US$196.5 billion after contracting 3.6 percent yoy in the previous quarter, he said.
The increase in the government;'s foreign debts resulted from the issuance of global sharia bonds (Sukuk Global) to meet the target of financing, including series Green Sukuk supporting climate change.funding, he said.
He went on to say the relatively high foreign capital inflows in the state securities market reflected positive perception of the government's efforts to manage macroeconomic policies to mitigate the impact of COVID-19, maintain stability and encourage economic recovery.
According to Widjanarko, the government has always managed its foreign debts in a cautious and accountable way to support priority spending in the health service and social activity sector (reaching 23.5 percent of the government's total foreign debts), the construction sector (16.4 percent), the educational service sector (16.3 percent), the financial service and insurance sector (12.4 percent) and the government administrative, defense, and compulsory social securities sector (11.7 percent)..
Meanwhile, the country's foreign debts from the private sector rose 8.2 percent yoy in the second quarter compared to 4.7 percent yoy in the previous quarter.
"The increase resulted from the growth of foreign debts from companies other than financial institutions, while foreign debts from financial institutions contracted," he said.
He said foreign debts from companies other than financial institutions increased to 11.4 percent in the second quarter from 7.0 percent in the previous quarter, while foreign debts from financial institutions fell to 1.7 percent from 2.4 percent.
Nearly 77.3 percent of foreign debts from the private sector came from the financial service and insurance sector, the electricity, gas, steam/hot water & cold air sector, the mining and extraction sector and the manufacturing industry.
The country's foreign debt structure remained healthy, supported by the application of prudential principles. The country's ratio of foreign debts to national gross domestic product at the end of the second quarter stood at 37.3 percent, up from 34.5 percent in the previous quarter.
Related news: Indonesia's foreign debt reached US$389.3 billion in Q1 2020
Related news: Foreign debt is within safe limit: Bank Indonesia
Translator: Ahmad Buchori/Suharto
Editor: Rahmad Nasution
Copyright © ANTARA 2020
