Indonesia’s foreign debt growth slowed in July 2015 by 3.7 percent (y/y) to a total of USD $303.7 billion from a 6.3 percent (y/y) growth pace in the preceding month. Based on the latest data from Indonesia’s central bank (Bank Indonesia) the nation’s total external debt consisted of USD $134.5 billion public sector foreign debt and USD $169.2 billion private sector foreign debt. Both public and private sector foreign debt growth slowed in July (compared to June) as these sectors were hesitant to take on more debt due to the depreciating rupiah.
Although the rupiah experienced 0.59 percent appreciation to IDR 14,374 per US dollar on Friday (18/09) according to the Bloomberg Dollar Index, Indonesia’s currency is still fragile amid looming further monetary tightening in the USA (Fed Fund Rate hike), a move that will most likely cause severe capital outflows from emerging markets, including Indonesia. Meanwhile, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) hit a fresh 17-year low on Friday as it depreciated 0.08 percent to IDR 14,463 per US dollar. So far this year, the currency of Southeast Asia’s largest economy has weakened 16 percent against the greenback.
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia
About 85 percent of Indonesia’s total offshore debt is long-term debt (implying a due date at least one year from now). This is positive as it prevents the emergence of sudden liquidity turmoil. However, about 25 percent of private sector external debt is short-term debt and therefore could cause financial difficulties for these companies.
In a statement Bank Indonesia wrote that private sector offshore debt (at the end of July 2015) was mainly concentrated in the financial, manufacturing, mining, and electricity, gas & water supply sectors. Together these four sectors account for 76.1 percent of total private sector foreign debt.
Indonesia's Foreign Debt - 2015:
|2015|| Public Debt
||Private Debt||Total Debt|
|January||$135.7 billion||$162.9 billion||$298.6 billion|
|February||$134.8 billion||$164.1 billion||$298.9 billion|
|March||$132.8 billion||$165.3 billion||$298.1 billion|
|April||$132.9 billion||$167.2 billion||$300.1 billion|
|May||$133.5 billion||$168.7 billion||$302.3 billion|
|June||$134.6 billion||$169.7 billion||$304.3 billion|
|July||$134.5 billion||$169.2 billion||$303.7 billion|
Indonesia's Foreign Debt - 2014:
|2014|| Public Debt
||Private Debt||Total Debt|
|January||$127.9 billion||$141.4 billion||$269.3 billion|
|February||$129.0 billion||$143.1 billion||$272.1 billion|
|March||$130.5 billion||$146.0 billion||$276.5 billion|
|April||$131.0 billion||$145.6 billion||$276.6 billion|
|May||$132.2 billion||$151.5 billion||$283.7 billion|
|June||$131.7 billion||$153.2 billion||$284.9 billion|
|July||$134.2 billion||$156.4 billion||$290.6 billion|
|August||$134.2 billion||$156.2 billion||$290.4 billion|
|September||$132.9 billion||$159.3 billion||$292.3 billion|
|October||$133.2 billion||$161.3 billion||$294.5 billion|
|November||$133.9 billion||$160.5 billion||$294.4 billion|
|December||$129.7 billion||$162.8 billion||$292.6 billion|
Source: Bank Indonesia