Indonesia's External Debt Falls to US$416.4 Billion in November 2021: Here's Why

Bank Indonesia (BI) recorded Indonesia's external debt (ULN) position at the end of November 2021 as down 1.4% month-to-month (m-to-m) to US$416.4 billion. The month-on-month decrease in the ULN position was due to declines in both government and private sector ULN.

Although down month-on-month, Indonesia's ULN position in November 2021 increased by 0.1% year-on-year (yoy). However, this growth was lower than in October 2021, which reached 2.2% (yoy).

In detail, Indonesia's ULN comprised government ULN of US$202.2 billion in November 2021, lower than the previous month's US$204.9 billion, or 1.3%. This position also fell by 0.7% year-on-year (yoy).

The decrease in the government's ULN was mainly due to adjustments in foreign capital flows in the State Debt Securities (SBN) market, in line with global sentiment that again drove the trend of increasing US Treasury yields after the Federal Open Market Committee (FOMC) meeting.

Furthermore, the central bank's ULN in November 2021 amounted to US$9 billion, down 1.1% (m-to-m). It is recorded that in November 2021, it was US$9 billion, down 1.1% (m-to-m). Meanwhile, the central bank's ULN during this period grew by 218.4% compared to the previous year (yoy).

In addition, BI also recorded a decrease in private ULN, both month-on-month and year-on-year. Private ULN in November 2021 amounted to US$205.2 billion, down 1.5% month-on-month (m-to-m). Compared to the same period the previous year, private ULN contracted by 1.9%.

The decrease in private debt was due to contractions in the ULN of financial institutions and non-financial corporations of 5.4% and 1% (yoy), respectively. This condition is in line with the repayment of ULN that matured during November 2021.

The central bank assesses that the structure of Indonesia's ULN in November 2021 remained healthy. The ratio of Indonesia's ULN to Gross Domestic Product (GDP) remained at around 35.5%, down from 36.1% the previous month.

Furthermore, the healthy structure of Indonesia's ULN is indicated by the fact that it remains dominated by long-term ULN. Its share was recorded at 89% of the total ULN.