Indonesian govt debt remains manageable despite rupiah slide: minister

Jakarta (ANTARA) - The rupiah's depreciation beyond Rp18,000 per US dollar has not disrupted the government's ability to service its debt, Finance Minister Purbaya Yudhi Sadewa said.

Speaking to reporters at the Parliamentary Complex in Jakarta on Thursday, Purbaya explained that government debt carries fixed-rate coupons, limiting the impact of exchange rate fluctuations on debt servicing.

However, he acknowledged that a weaker rupiah increases interest payments on government debt denominated in foreign currencies.

Nevertheless, Purbaya said the current movement of the rupiah remains within the government's projections.

"The coupons are constant. Debt servicing is done through the coupons. A weaker rupiah only increases the payment amount when converted into rupiah," he said.

The government has set an exchange rate assumption of Rp16,500 per US dollar in the 2026 State Budget.

Purbaya added that the government had conducted exchange-rate simulations when fuel prices surged due to geopolitical conflicts.

He did not elaborate on the scenarios used, but said the rupiah's fundamentals remain stronger than the current level.

"Basically, the rupiah's fundamentals are stronger than the current exchange rate level," Purbaya remarked.

Separately, Bank Indonesia (BI) said it would continue intervening in the foreign exchange market more intensively as the rupiah hovers around the Rp18,000-per-dollar level.

BI Senior Deputy Governor Destry Damayanti said the central bank is also strengthening the interest-rate structure of its market-based monetary instruments to maintain the attractiveness of domestic assets for foreign capital inflows.

"Consistent intervention will continue through Non-Deliverable Forward (NDF) transactions in offshore markets, spot and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market, as well as purchases of government bonds in the secondary market," she said.

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Translator: Imamatul, Kenzu

Editor: Anton Santoso

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