Indonesia Fails to Pay but Denies It’s in Default
Crisis-racked Indonesia said Tuesday that it had not met some principal payments on its sovereign debt in August but insisted this was not a default as it had already been agreed with the international community.
In Paris, an official of the Paris Club of creditor nations said Indonesia had been expected to suspend some debt repayments in August ahead of a meeting in September to work out a framework for debt rescheduling.
“We have begun to reschedule the principal on repayment of our foreign debt. This is nothing new because the international community has known about this, it was agreed with the IMF. . . and we have spoken to the Paris Club,” Indonesia’s chief Economics Minister Ginandjar Kartasasmita told Reuters.
“So it is not true that it is a default,” he said when asked to comment on news wire reports that Indonesia had defaulted on sovereign debt repayments.
Ginandjar said Indonesia had agreed in July with some bilateral creditors that the country would suspend principal payments on its debt to them while continuing to pay the interest.
Loans from Japan, as well as the International Monetary Fund and World Bank, were not included in the rescheduling, Ginandjar said.
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