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FX reserves lose $4.1 b in May
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A bank teller holds up a US dollar note at a bank in Jakarta. (Kontan/Fransiskus Simbolon)
F
oreign exchange (FX) reserves fell by US$4.1 billion over the course of just one month, standing at $103.6 billion by the end of May, according to a Bank Indonesia (BI) statement issued on Tuesday.
The central bank attributed the steep drop to high demand for seasonal FX obligation payments, which usually include dividend payments. Repayments of government debt and rupiah value stabilization measures also contributed to the fall.
However, FX reserves remain sufficient to fund 7.9 months of imports or 7.6 months of imports and foreign debt payments, above the international standard of equal to three months of import payments.
BI projected that May’s plunge would prove temporary, thanks to an improving global economy, as shown by a greater FX supply in the domestic market.
“Bank Indonesia is of the view that FX reserves are enough to support [the country's] external sector tenacity and maintain the continuity of Indonesia's economic growth,” BI spokesperson Tirta Segara wrote in the statement. (dmr)
