TEMPO.CO, Jakarta - Bank Indonesia (BI) Governor Perry Warjiyo views that Indonesia`s foreign debt is still in the safe zone compared to the ratio of the country`s gross domestic product (GDP).

“Viewing several indicators of the issue of foreign debt, its ratio against the GDP is still quite safe for the government and private sector,” said Perry on Friday, June 22.

Bank Indonesia recorded the country’s foreign debt up to April 2018 was growing slowly to US$356.9 billion. Based on the latest exchange rate between rupiah and the US dollar, Indonesia’s foreign debt has reached Rp4,996.6 trillion.

Read: Indonesia's Foreign Loan at US$3,569 bn in April

The foreign debt of the government and central bank is US$183.8 billion and debt of the private sector and the state-owned enterprises (BUMN) amounts to US$173.1 billion.

“Don’t just look at the nominal since it’s relative [to current situations]. One US dollar today is different to the one US dollar 10 years ago. It must be compared fairly” said Perry.

Moreover, Perry claims that the debt service ratio is still in a safe amount. The Bank Indonesia's governor argues that there are cautionary provisions, especially for non-corporate private sector foreign debt, which can be seen in the hedging obligations.

Muhammad Hendartyo