Government to Gradually Repay US$8.6 Billion in Foreign Debt Annually

Indonesia's government and Bank Indonesia (BI) external debt reached US$179.73 billion, or approximately Rp2,659.98 trillion, at the end of June 2018. According to Indonesia's External Debt Statistics, this figure decreased by US$4.96 billion from its highest level of US$184.69 billion recorded in March. Government external debt accounted for 50.52% of Indonesia's total external debt, which reached US$355.74 billion.

Meanwhile, external debt payments throughout the first half of 2018 totaled US$6.48 billion. This figure comprises principal payments of US$4.39 billion and interest payments of US$2.08 billion. Averaged, government and central bank external debt payments reached US$8.6 billion, or approximately Rp127 trillion per year.

One reason for the decline in BI's foreign exchange reserves this year is payments on external debt and financing imports. However, the largest factor was maintaining the rupiah's stability to prevent a sharp fall. Despite the decrease, BI's foreign exchange reserves are still sufficient to finance 6.6 months of imports and government external debt payments. This is above the international standard of 3 months.