Former BI Governor Agus Martowardojo and the Governor Perry Warjiyo - Photo by Bank Indonesia

JAKARTA (TheInsiderStories) – Indonesia’s foreign exchange reserves dropped US$3.1 billion to $114.8 billion at the end of September 2018, the central bank reported on Friday (05/10). The amount is lowered from August position which stood at $117.9 billion.

Bank Indonesia’s (BI) governor Perry Warjiyo has said to keep the inflation rate from impacting the weakening of the Rupiah, he said, the central bank has been in the market to monitor and carry out stabilization measures. One of them is by ensuring supply and needs move well on the foreign exchange market.

Warjiyo added, the weakening of the Rupiah because of the strengthening of the US dollar which was accompanied by an increase in yields on US 10-year Treasury Bill to 3.23 percent.

Furthermore, BI said in a written statement, the reserve asset position was equivalent to financing of 6.5 months of imports or 6.3 months of imports and servicing of government external debt, well above the international standard of reserve adequacy of 3 months of imports.

BI considers the official reserve assets position is able to support the external sector resilience and maintain macroeconomic and financial system sustainability.

Furthermore the central bank explained, the decline in the forex reserves was mainly due to government external debt repayment and Rupiah stabilization amidst high global financial market uncertainty. Going forward, Bank Indonesia considers the official reserve assets remain adequate supported by confidence in stability and the upbeat outlook for the domestic economy as well as positive export performance.

Written by Staff Editor, Email: theinsiderstories@gmail.com

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