Jakarta. Indonesia's external debt rose to $444.4 billion in May from $439.8 billion a month earlier, driven by higher government and central bank borrowing, while private-sector external debt continued to edge lower, Bank Indonesia (BI) said on Tuesday.

The country's external debt was 2.1% higher than a year earlier, when it stood at $435.6 billion.

BI spokesperson Ramdan Denny Prakoso said Indonesia's external debt-to-GDP ratio stood at 29.9% in May and remained at a manageable level.

“The government will continue optimizing the use of external borrowing to support development financing and sustainable economic growth while minimizing risks that could affect macroeconomic stability,” Ramdan said in a statement.

Government Borrowing Increases
Government external debt totaled $217.3 billion in May, up 3.7% from a year earlier and broadly in line with April's growth rate.

Ramdan said the increase was mainly driven by stronger demand from foreign investors for Indonesia's international government bonds, reflecting continued confidence in the country's economic outlook.

He said the government remains committed to meeting all debt obligations on time while managing external borrowing prudently, efficiently, and with sufficient flexibility.

Most government external debt has long maturities and is primarily used to finance public services and development, including healthcare and social programs, public administration and defense, education, construction, and transportation infrastructure.

Meanwhile, higher external liabilities at Bank Indonesia were attributed to increased foreign holdings of the central bank's Rupiah Securities (SRBI), as part of its market-based monetary operations and efforts to support exchange rate stability amid persistent global uncertainty.

Private-sector external debt stood at $195.9 billion in May, representing a 0.1% annual decline.

Most private external borrowing was concentrated in the manufacturing, financial services and insurance, electricity and gas, and mining sectors, which together accounted for 79.9% of total private external debt.

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