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Forex reserves drop as BI intervenes rupiah
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Greenback: A bank teller counts a stack of US dollars in Central Jakarta. (JP/Wendra Ajistyatama)
I
ndonesia’s foreign exchange (forex) reserves have fallen by US$3.5 billion in just one month as Bank Indonesia (BI) intervened in the rupiah exchange rate, whose value against the US dollar dropped to a level unseen in five months in November.
The central bank announced on Wednesday that forex reserves stood at $111.5 billion at the end of November from the $115 billion recorded in October. The amount is sufficient to fund 8.5 months of imports or 8.1 months of imports and government foreign debt payments, higher than the international standard of three months.
“The drop in November was mainly caused by forex demands to pay the government’s foreign debts and to stabilize the rupiah exchange rate in accordance with its fundamentals,” BI communication department director Arbonas Hutabarat wrote in an official statement.
The rupiah’s value against the greenback plunged to Rp 13,865 per US dollar on Nov. 11, the lowest point since June 24, triggered by a selling spree by forex traders, particularly in non-deliverable forward (NDF) derivative contracts.
BI senior deputy governor Mirza Adityaswara admitted at the time that the central bank had intervened in local forex and sovereign bond markets to stabilize the rupiah.
However, Arbonas stated that BI expected the reserves drop to be temporary as optimism about the domestic economy remained significant, export performance was improving and global financial markets had started to stabilize. (hwa)
