Indonesia’s Foreign Debt Drops to IDR 5,935 Trillion in the Fourth Quarter of 2021

JAKARTA, KOMPAS.com – Bank Indonesia (BI) recorded the position of foreign debt Indonesia’s external debt has decreased in the fourth quarter of 2021, either on a quarterly or annual basis.

Indonesia’s external debt position at the end of the fourth quarter of 2021 was recorded at 415.1 billion US dollars, equivalent to Rp. 5,935 trillion (assuming an exchange rate of Rp. 14,300 per US dollar), down from the position of external debt in the previous quarter of 424.0 billion US dollars.

Meanwhile, on an annual basis, the position of external debt in the fourth quarter of 2021 contracted 0.4 percent, after growing 3.8 percent on an annual basis in the previous quarter.

“This development was caused by a decrease in the position of external debt in the public sector (government and central bank) and the private sector,” said Head of the BI Communications Department Erwin Haryono in a statement, Tuesday (15/2/2022).

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In the last three months of 2021, the Government’s external debt was recorded at 200.2 billion US dollars, a decrease from the previous quarter’s position of 205.5 US dollars.

This caused the government’s external debt to contract 3.0 percent on an annual basis, after growing 4.1 percent on an annual basis in the third quarter of 2021.

The decrease in ULN occurred along with a series of State Securities (SBN) that matured and the repayment of part of the loan principal in the fourth quarter of 2021.

In addition, volatility in global financial markets that tends to be high also affects the shift of investment from SBN to other instruments, thereby reducing the share of non-resident investors in SBN.

“From the risk side refinancing“The position of government external debt in the fourth quarter of 2021 is relatively safe and under control, considering that almost all external debt have long-term tenors with a share of 99.9 percent of the government’s total external debt,” said Erwin.

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The private external debt position was recorded at 205.9 billion US dollars in the fourth quarter of 2021, down from 209.3 billion US dollars in the third quarter of 2021.

On an annual basis, private external debt contracted 0.9 percent YoY, after growing 0.6 percent YoY from the previous quarter in line with net repayments of loans and other debts during Q4-2021.

This development was driven by the deepening contraction of external debt of financial institutions to 4.2 percent on an annual basis, from the previous quarter’s contraction of 2.7 percent on an annual basis, and contraction of non-financial corporate external debt to around 0.01 percent yoy, after growing 1.5 percent. yoy in Q3-2021.

With these realizations, BI assessed that Indonesia’s external debt in the fourth quarter of 2021 remained under control, as reflected in the ratio of Indonesia’s external debt to Gross Domestic Product (GDP) which was maintained at around 35 percent, a decrease compared to the ratio in the previous quarter of 37 percent.

“In addition, the structure of Indonesia’s external debt remains healthy, as indicated by a more dominant long-term external debt with a share of 88.3 percent of total external debt,” said Erwin.

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