JAKARTA (TheInsiderStories) — Good morning! Indonesia kept climbing on the foreign debt lane. An official statement mentioned that the nation holds US$372.9 billion foreign debt in November 2018, hiked by 7 percent compared to the same period in the prior year.
The spike was contributed from both government and Bank Indonesia (BI), private companies, including state-owned enterprises.Indonesian government and central bank owned $183.5 billion debt.
Government foreign debt growth was on account of foreign capital inflows to government securities market. Meanwhile, private companies including state-owned enterprises have $189.3 billion debt. The hike mainly driven by foreign buying of corporate bonds.
It incurred in financial and insurance services, manufacture, gas, electricity, and water supply sector, as well as mining sectors.
The increase itself in November only is quite big with $12.3 billion additional debt from October. According to BI, the increasing debt was caused by withdrawals of the external debt and Rupiah against US Dollar strengthening, that resulted in bigger local denomination debt held by foreign investors in term of US Dollar.
Amid the constantly increasing foreign debt, the central bank still considered Indonesia’s foreign debt structure as healthy. Its ratio to Gross Domestic Product (GDP) is at 34 percent, better than peers’ average. Moreover, 84 percent of the total foreign debts have long-term maturity.
The automotive industry association reported, during last year, total car sales in Indonesia fell 2 percent in December to 1,079,886 units, almost flat compared to 2017 with amount 1,079,300 units. PT Astra International Tbk (ASII), still hold the majority market shares at 51 percent.
Furthermore, Democrat party fraction in House of Representatives encouraged an establishment of special committee, over PT Freeport Indonesia (PTFI) shares divestment. The deputy chairman of Commission VII, Muhammad Nasir believes there’s something odd with PTFI’ 51 percent shares divestment to the state-owned enterprise PT Indonesia Asahan Aluminium.
According to him, the decision collided with many regulations. He said, there’s a special treatment for Freeport Indonesia to get special mining business permit in a short-time. Nasir then compared it to his constituency in Riau, where many companies need months or even years to obtain the permit.
Moreover, he also not see any importance of taking over Freeport Indonesia’s shares in the period of time. He considered that it will be easier to do when the contract of work finished in 2021.
In the financial market, after blooming for several days Rupiah against US Dollar declined by 0.22 percent to 14,084 on Tuesday (01/16). Even so, the bad sentiment did not impact the Jakarta Composite Index. The stock market closed gaining by 1.14 percent to 6,408.78. Foreign inflow also hit record during the year at Rp1.9 trillion (US$134.75 million).
Yesterday, most of Southeast Asian stock markets recover after China signaled to release more stimulus to support its slowing economy, a day after released December trade data. The country’s trade data showed had been hit hard by the tariff war with US.
Today, BI will announce 2018’s banking survey report. The central bank Board of Governors will also start the two-day meeting to determine benchmark rate and several macroeconomic policies.
May you have a profitable day!
Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia