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View all search resultsIndonesia's forex reserves drop $9.4b in March as BI steps up efforts to stabilize rupiah
The rupiah lost around 15 percent of its value against the US dollar in March as investors rushed to sell riskier assets and flock to safe haven assets over fears of COVID-19's rapid spread.
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A US dollar bill is pictured behind a protective mask, which are widely used as protective gear against COVID-19, in this illustration taken March 17. (REUTERS/Alexey Pavlishak/File Photo)
I
ndonesia’s foreign exchange (forex) reserves dropped US$9.4 billion in March to $121 billion as Bank Indonesia (BI) stepped up market intervention to stabilize the rupiah exchange rate amid heavy capital outflows, according to the central bank.
Forex reserves have continued to decrease since February, when they dropped from $131.7 billion in January, the second-highest level in the country’s history. March’s figure is enough to support seven months of imports and payments of the government’s short-term debts and is above the international adequacy standard of about three months of imports.
BI said the decline in forex reserves in March was due to payments of the government’s external debts and market intervention to stabilize the country’s currency amid “extraordinary conditions due to panic in the global financial market triggered by the rapid and widespread effect of COVID-19 throughout the world”.
Read also: Rupiah inches closer to Rp 17,000 per US dollar as COVID-19 fears grow
“The fear has induced capital outflow and amplified exchange rate pressures on the rupiah, especially in the second and third week of March 2020,” BI wrote in a statement on Tuesday.
The rupiah lost around 15 percent of its value against the dollar in March as investors rushed to sell riskier assets and flock to safe haven assets amid fears over COVID-19’s rapid spread.
Foreign investors have sold Rp 148.76 trillion (US$9.04 billion) in Indonesian assets, including Rp 135.08 trillion in government bonds and Rp 9.71 trillion in Indonesian shares, BI data shows.
