TEMPO.CO, Jakarta - Bank Indonesia (BI) recorded that the state`s foreign loan grew at a slower pace at the end of April 2018 to US$356.9 billion. The amount comprises of the government and the central bank's loan of US$183.8 billion, plus SOEs and the private sectors' US$173.1 billion.

"Indonesia's foreign loan grew 7.6 percent (yoy) at the end of April 2018, a slower growth compared to March's 8.8 percent (yoy)," BI executive director of communication Agusman Zainal said in a written statement on Thursday, June 21.

Agusman said the slowdown is experienced by both the government and the private sector; reflecting foreign investors' trust in Indonesia's securities and fiscal management amid global liquidity pressures.

According to Agusman, the private sector's main cause for the foreign loan slowdown was the declining loans of the mining, manufacturing, and financial services sectors.

He added that—based on the time period—the structure of Indonesia's foreign loan at the end of April was dominated by long-term loans, which accounted for 86.7 percent.

Agusman said BI is coordinating with the government to continue monitoring foreign loans in a bid to optimize its role in development financing without risking the economic stability.

In April, the government issued global bonds denominated in euro and the US dollar with the SEC-Registered Shelf format. It allows the government to issue bonds in the capital market anytime there is a need for it.

Agusman said the global bond issuance rides on the positive momentum stemming from Moody’s decision to upgrade Indonesia's debt rating on April 13. Moody's changed its outlook from Baa3 (positive) to Baa2 (stable).

Another contributing factor is Indonesia's improved macroeconomics in April.

Muhammad Hendartyo