Not Worried About US Payment Defaults, Ministry of Finance: Indonesia does not have a US Treasury

Ministry of Finance (MoF) office at Banteng Field, Central Jakarta., JAKARTA — The government has ensured that the performance of the Indonesian government securities market will not affect US debt defaults. Director General of Financing and Risk Management at the Ministry of Finance, Suminto, said that so far the Indonesian government does not hold or own US Treasuries, and this makes Indonesia’s condition still safe.

“Therefore, it will not have a significant impact on the Indonesian state securities market,” he told RepublikaFriday (26/5/2023).

In addition, domestic liquidity is also ensured ample or adequate accompanied by the inflow of foreign capital. Suminto said that foreign ownership (non-resident) of state securities increased by IDR 61.46 trillion (ytd). Perceptions of Indonesia’s credit risk also improved, marked by a decline credit default swaps of 6.43 bps (mtd) and 9.53 bps (ytd).

Suminto said that the United States had repeatedly faced problems in the process of approving the debt ceiling by Congress. Despite this, they are usually able to come to an agreement in the end.

It is in the United States government’s interest to ensure it can meet their fiscal costs, incl debt services or overdue debt. Therefore, so far there has been no impact on financial markets.

“The US debt ceiling issue has so far not affected US financial markets, nor global financial markets,” he said.

US Treasury Secretary Janet Yellen warned that Congress’s failure to raise the government’s debt ceiling would result in default on US debt. he warned default would trigger an economic catastrophe.

It was noted that the US debt was US$31 trillion in October 2022, while as of March 31 2023 it had increased to US$31.45 trillion.


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