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View all search resultsIndonesia’s foreign exchange reserves have declined slightly as Bank Indonesia (BI) battles fresh bouts of rupiah volatility.
BI revealed in a press statement on Wednesday that the country’s forex reserves stood at US$146.3 billion in September, down slightly from $146.5 billion in the preceding month.
Central bank spokesperson Ramdan Denny Prakoso said in the statement that the decline was partly caused by BI’s “rupiah exchange rate stabilization policy” amid “global financial market uncertainties that remain high”.
The reading was equal to 5.3 months of imports, above the international adequacy standard of about 3 months, which BI views as “sufficient to support the resilience of the external sector, as well as maintain macroeconomic and financial system stability”.
The amount has been flatlining since June, after the reserves declined for five consecutive months. The first half of the year was particularly rough for the rupiah that initially was battered by fiscal concerns because of a swelling budget deficit last year.
The condition was exacerbated by institutional concerns after Thomas Djiwandono, President Prabowo Subianto’s nephew, was sworn in as BI deputy governor in early February, raising questions about the central bank’s independence.
However, the heaviest pressure stemmed from the Middle East as soon as the United States and Israel fired the first barrage of missiles on Iran on Feb. 28.
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