Indonesia’s foreign exchange reserves slid to US$119.8 billion as of June, lower than the $122.9 billion recorded a month earlier as Bank Indonesia (BI) continued to defend the rupiah against a stronger United States dollar.
In a statement released on Friday, the central bank said the decline in foreign exchange reserves in June was mainly driven by the payment of the government’s external debts and stabilization of the rupiah amid greater uncertainty in global financial markets.
“BI feels that foreign exchange reserves are still able to support the resiliency of the external sector while maintaining macroeconomic and financial system stability,” BI spokesman Agusman said in the statement.
The latest figure is sufficient to finance 7.2 months of imports, or 6.9 months of imports if it includes the payment of the government’s external debts, still higher than international adequacy standards of around three months of imports, BI said.Read also: Foreign exchange reserves slid to US$124.9 billion in April
Going forward, the central bank believes the foreign exchange reserves will be able to withstand external shocks, supported by the positive outlook of the domestic economy and a positive export performance.