REPUBLIKA.CO.ID, JAKARTA - Interest rates in developing countries will increase as global economy is predicted to improve. Hence, Bank Indonesia as the country's central bank urges local companies to remain cautious on foreign debt.

"Companies must be careful on unnecessary debts and use it only for productive purposes," Governor of Bank Indonesia (BI), Agus Martowardojo said recently.

Interest rate in Indonesia is quite high, so the increase on foreign exchange rate will impact the economic sector. BI also asked companies whose revenues in USD must hedge its foreign exchange debts. 

"Otherwise, its impacts will be seen on company's annual report," Martowardojo said.

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