Moody’s Investors Service said in its report that India and Indonesia are among Asia’s worst-hit Asian currencies this year. It’s no surprise that India and Indonesia are among the worst-hit Asian currencies this year when we look at their foreign debt exposure and the level of reserves they have to cover that.
Indonesian Rupiah has touched its lowest level Rp14,200 against U.S dollar during this month while Indian Rupee ended at 67.13 in May, 7, its lowest close since Feb. 8, 2017.
It said Moody’s Investors Service’s external vulnerability index – puts Indonesia at 51% and India at 74%. External vulnerability index is the ratio of short-term debt, maturing long-term debt and non-resident deposits over a year calculated as a proportion of reserves.
Finance Minister Sri Mulyani Indrawati has assured the public the government will keep the country’s debt-to-GDP ratio below 30%, far lower than the legal threshold set at 60%.
Indonesian government debt reached Rp3,938.7 trillion (US$281.34 billion) as of the end of 2017, up from its position of Rp3,515.4 trillion at the end of 2016. Despite this bulge, Indonesia’s public debt is still considered ‘safe’ at just 29.2 per cent of gross domestic product (GDP).