Indonesia has secured up to $6 billion worth of standby loans from official creditors that could be used if the government struggled to raise debt in the financial market, the finance minister said on Monday. Finance Minister Sri Mulyani Indrawati made the comments as the government launched a roadshow this week for its $4 billion global medium term notes, rated BB, or two notches below investment grade by Fitch Ratings.
The planned bond sales come amid concerns the government may have to pay costly borrowing costs due to the global credit crisis. "We have secured both bilateral and multilateral support worth between $5 billion to $6 billion. This should be enough if the government has to face market risks such as being unable to sell bonds," Indrawati told reporters, without elaborating.
Planning Minister Paskah Suzetta told Reuters in an interview on January 28 that Indonesia intended to withdraw this year only half of $5.5 billion in standby loans committed by official creditors as the government sought to reduce its debt ratios further. Indonesia has said it was seeking standby loans from official creditors including Australia, the World Bank, and the Asian Development Bank in order to secure funding for a projected 132 trillion rupiah ($11.38 billion) budget deficit in 2009.