Tuesday, 11 December 2018 | 22:43 WIB

Foreign Exchange Reserves rises to $115 billion as Rupiah strengthens

Rupiah currency

JAKARTA, NNC - Strengthening of the Rupiah exchange rate settling at IDR14,500 per US dollar gives a negative sentiment towards Indonesia's foreign exchange reserves.

Foreign exchange reserves rose significantly, around $400 million to $115.2 billion at the end of October 2018 from $114.8 billion.

According to Bank Indonesia's official report on Wednesday, Nov 7, the increase in foreign exchange reserves in October 2018 was the first time in nine months this year to show a decline.

"The increase in foreign exchange reserves is influenced by oil and gas foreign exchange revenues and the withdrawal of government foreign debt (ULN) which is greater than the foreign exchange needs for the payment of government foreign debt and stabilization of the rupiah exchange rate," BI said in an official statement.

The position of foreign exchange reserves at the end of October 2018 is equivalent to financing 6.4 months of imports or 6.2 months of imports and payment of government foreign debt, and is above the international adequacy standard of around three months of imports.

"The Central Bank consider that foreign exchange reserves are able to support the resilience of the external sector and maintain macroeconomic and financial system stability," BI said.

Referring to the date from BI, the amount of foreign exchange reserves since the beginning of the year was as follows, January 2018, foreign exchange reserves of $131.9 billion fell in February 2018 to $128.06 billion as the need for exchange rate stabilization faced external economic pressure.

Foreign exchange reserves also fell $2.06 billion in March 2018 to $126 billion. Then in April 2018 foreign exchange reserves were cut back to $124.9 billion.

In May 2018, foreign exchange reserves reached $122 billion, which later dropped $3.1 billion to $119.8 billion in June 2018. As of the end of July 2018, foreign exchange reserves slumped $1.5 billion to $118.3 billion.

At the end of August 2018, foreign exchange reserves fell $400 million to $117.9 billion and plummeted $3.1 billion to $114.8 billion at the end of September 2018.

In the future, BI saw foreign exchange reserves to remain adequate, supported by confidence in the stability and prospects of the domestic economy, as well as improving export performance.