BI to Watch Private Sector Debt
28 February 2014 10:00 WIB
TEMPO.CO, Jakarta - Bank Indonesia (BI) Governor Agus Martowardojo said private sector debt must be watched due to its high growth.
"We understand some of the loans for parent companies are related to trade but they have to be cautious," Agus said after ANZ-Antara Economic Outlook at Hotel Mulia, Jakarta, Wednesday.
Private sector's caution is needed because exchange rate has yet to be stable. "They should never lead to mismatches that include currency mismatch, tenor mismatch and floating-to-fit mismatch. Those can cause risks," Agus uttered.
Earlier, deputy finance minister Anny Ratnawati said foreign private sector debt must be under supervision. The government, BI and the Financial Service Authority (OJK) must cooperate to watch the extent of foreign private sector debt invested in business and companies' financial condition, said Anny.
"These must also be monitored by the OJK because those who reported foreign debt were mostly go-public companies or insurance and financing companies," Anny said.
In this case, OJK will be able to anticipate the impact of the debt.
Bank International Indonesia (BII) chief economist Juniman urged the government to be actively involved in reducing the private sector debt by issuing debt to equity ratio (DER). With the policy, the government will be able to control business owners not to take loans beyond their capability to repay their debts.
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