The Stronger Yen, What Impact?

The yen rose to a record level of 76.25 per U.S. dollar during the earthquake and tsunami.

Japan is Indonesia's biggest creditor nation. Government debt to Japan in 2011 reached 44.4 percent or U.S. $ 30.46 billion of total government debt of U.S. $ 68.57 billion.

According to the booklet published by Government Development Directorate General of Debt Management, Ministry of Finance, Japan was ranked first. Then followed the World Bank amounting to 16.6 percent or U.S. $ 11.41 billion, the ADB by 16 percent or U.S. $ 11.05 billion, and so on-lan for 22.8 cent or S $ 15.65 billion.

Government debt denominated in yen alone by 22 per cent of total debt. In fact, the earthquake and tsunami recently gained a strengthened Yen. How does it affect Indonesia's debt payments?

Director General of Debt Management Waluyanto said the yen which rose slowly lately will make debt payments more expensive yen. However, the strengthening exchange rate of rupiah against the U.S. dollar sat on the same time provide space savings.

"Clearly affected, but there is a net savings because of the strengthening of the rupiah against the dollar," said Rahmat told VIVAnews.com in Jakarta, Tuesday, March 22, 2011.

In terms of project financing, no change nothing. According to him, Japan is still committed to funding activities and projects in Indonesia. Country's largest lender to channel loans through the Japan Bank for International Cooperation (JBIC) and Japan International Cooperation Agency (JICA). "Most of the projects that have been Committed multi years. Until now, everything still goes well," he said.

Yen today traded around 80.96 per dollar, stronger or thinner than the previous day 81.03 per U.S. dollar as the Japanese market reopened after the long holiday weekend. Yen had strengthened to a record level of 76.25 per U.S. dollar during the earthquake and tsunami disaster some time ago.