The Jakarta Post
Bank Indonesia (BI) has reported that the country’s foreign exchange reserves fell to US$122.9 billion as of late May, down from $124.9 billion in the previous month.
The decrease was attributed to measures to stabilize the rupiah against the US dollar and foreign debt payments by the government.
However, BI gave an assurance that the current foreign exchange reserves were enough to finance 7.4 months of imports or 7.2 months of foreign debt.
“Our foreign exchange reserves are still above the international adequacy standard, which is around three months of imports,” BI spokesman Agusman said recently, as quoted by Tempo.co.
BI said it believed that the foreign exchange reserves could support the nation’s macroeconomic and financial system stability.
The foreign exchange reserves have been decreasing since early this year. In February, the foreign exchange reserves fell to $128.06 billion after they reached their highest level of $131.9 billion in January.
The decrease was mainly attributed to a weaker rupiah, which had occurred since February. The currency has surpassed the psychological level of Rp 14,000 per US dollar in the past few weeks.
Newly appointed BI Governor Perry Warjiyo previously said the weaker rupiah was caused by external conditions, particularly since United States Federal Reserve chairman Jerome Powell took office in February.
To help the rupiah regain its strength, BI increased its seven-day reverse repo rate ( 7DRR ) twice in May. The BI board of governors has hiked its benchmark rate from 4.25 percent to 4.75 percent. Since the hikes, the rupiah has slowly climbed its way up from its lowest point of Rp 14,215 per US dollar to Rp 13,940 on Friday. (ris/dwa)