Australia’s Finance Minister Josh Frydenberg explained that the approval of the Rp 15.45 trillion loan was due to Indonesia’s record of sound fiscal management that has allowed it to swiftly respond to the Covid-19 crisis.
"This loan reflects the extraordinary times which we all must face together and is in recognition of Indonesia’s record of sound fiscal management. Indonesia’s strong and quick recovery is critical for not only Indonesia but for Australia and our region,” said Frydenberg.
Indonesia’s Finance Minister Sri Mulyani stated that the Australian government’s loan gives the Southeast Asian nation room to maneuver several policies to mitigate the coronavirus pandemic.
The financial loan will enable Indonesia to lower its fiscal risks as the government expects a budget deficit of 6.34 percent in 2020.
“It's providing us with the room to maneuver, as well as diversifying our risk so we are able not only to cope with Covid-19, helping people, business and Indonesian SMEs but can also maintain the safety and sustainability of our fiscal stance,” stated Sri Mulyani.
The Australian government has given Indonesia 15 years to repay the AUD $1.5 billion. Sri Mulyani explained that the loan supports the Asian Development Bank-led Covid-19 Active Response and Expenditure Support Program.
“The loan builds on our highly valued economic relationship and strong record of bilateral cooperation. Australia and Indonesia are neighbors, friends and Comprehensive Strategic Partners, and we are committed to supporting one another through this crisis.”
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