Debt Financing Realization Is in a Declining Trend During 2022

US dollar, rupiah, exchange rate, money, finance
US Dollar/Debt Financing

The realization of Indonesia’s debt financing until December 14, 2022, reached IDR 540.3 trillion. This figure shows a decrease of 24.3% compared to the realization of the same period last year which reached IDR 713.8 trillion.

In detail, the issuance of State Securities or SBN (net) until December 14, 2022, was recorded at IDR 531.4 trillion, down 26.5% compared to the same period last year which amounted to IDR 723.3 trillion.

Then debt financing from loans (net), until December 14, 2022, reached IDR 8.9 trillion or experienced a contraction or decreased 192.5% from the same period the previous year with minus IDR 9.6 trillion.

“It can be shown that this funding will improve the health of the state budget. The reduction is quite good, consistent with the state budget remaining healthy,” explained Sri Mulyani at our APBN conference yesterday, Tuesday (20/12/2022).

“That’s why the rating agency shows that the state financial budget is in a stable outlook rating position,” said Sri Mulyani again.

Sri Mulyani explained, the management of debt financing was maintained in the face of volatile financial market conditions, with the trend of increasing interest rates and the fluctuating rupiah exchange rate.

The Ministry of Finance also claims to have taken anticipatory steps in debt financing. Among them, adjusting the target for issuing cash debt through auction in the fourth quarter of 2022 taking into account the condition of the government’s cash.

In addition, the issuance of domestic SBN in the context of SKB III with Bank Indonesia (BI) was optimized, and the issuance of Retail SBN was also optimized in the framework of expanding the domestic investor base.

Another strategy of the Ministry of Finance in conducting debt financing is the flexibility of program loans used as a source of financing, in anticipating financial market volatility.

The issuance of SBN through the 2022 auction was completed in the first week of December 2022. This year is also the last year for BI and the Ministry of Finance’s burden-sharing.

Meanwhile, the actual purchase of SBN by BI through SKB I amounted to IDR 49.1 trillion, consisting of IDR 25.2 trillion SUN and IDR 23.9 trillion SBSN. Then in SKB III, it reached IDR 95.42 trillion.

The remaining cash debt financing target will be met through the issuance of SBN in the framework of SKB III with BI and the withdrawal of program loans.