REPUBLIKA.CO.ID, MANADO -- An executive of Bank Indonesia (BI) said the country's foreign debts are still safe in a healthy position.

"We see foreign debts in their amounts compared to the country's economic output and the repayment terms," Assistant Director of the representative office of the central bank for North Sulawesi Ignatius Adhi said.

Short term debts carry greater risk as repayments always weigh on the country's financial condition.

The country's foreign debts were dominated by long term debts which accounted for 84.7 percent.

Long term debts grew 12 percent (yoy) in January, 2015 or faster than a growth of 11.3 percent in December, 2014.

Short term debts grew only 0.4 percent (yoy) in January, 2015 slower than a growth of 3.2 percent in the previous month.

Long term debts of the public sector in January, 2015 totaled US$131.6 billion or 97 percent of the total debts of the sector.

The long term debts of the private sector totaled US$121.5 billion in January 2015 or 74.6 percent of its total debts.

The types of the debts are also important, Igantius said, adding if a government debt is in bonds the repayment would be safer as normally the government already has the repayment scenario of bond debts.

If the debts are dominated by the private sector the risk is higher as it is often the repayment scenario of the private sector is not clear, he said.

Therefore, in general, the central bank still considered the country's foreign debts as safe and necessary, Ignatius said.

"I think foreign debts have contributed to the country's economic expansion. The government could provide fund to finance infrastructure projects without foreign loans," he said.

Earlier, communications executive director of the central bank Tirta Segara said the country's debts in January grew 10.1 percent from a year before.

The debts of the private sector grew slower, up 13.6 percent (yoy) in January from 14.2 percent in December, 2014, Tirta said in Jakarta.

The debts of the public sector grew faster - up 6.1 percent (yoy) in Janmuary from 5 percent in December, 2014, he said. The growth was attributable mainly to government's global bonds of US$4 billion.

The debts of the private sector by the end of January, 2015 were made up mainly of debts in the financial sector, mining sector and in the electricity , gas and drinking water sector totaling US$US$47.2 billion, US$32.2 billion, US$26.4 billion and US$19.2 billion respectively.

Ikuti Whatsapp Channel Republika