Bank Indonesia (BI) announced on Tuesday that the foreign exchange reserve increased to US$120.7 billion in December from $117.2 billion the previous month.

“The foreign exchange position is adequate to finance 6.7 months of import transactions or 6.5 months of import transactions and foreign debt payments,” said the central bank in a statement on its official website.

BI added that the increase in the foreign exchange reserve would enable macroeconomic and financial stability and help defend the country’s economy from external pressures.

The increase was made possible because of foreign exchange revenue from the oil and gas sector, the issuance of global bonds and the withdrawal of the government’s foreign loans, it said, adding that it would have a positive impact on the country’s economy.

As previously reported, the foreign exchange reserve declined to $114.8 billion in September from $117.9 million in August. The decline was triggered by various factors, including the need for BI to intervene in the market to protect the rupiah and to pay off foreign debt. (bbn)