JAKARTA (TheInsiderStories) – Bank Indonesia (BI) noted foreign exchange reserves of the country slightly lowered to US$126.6 million from a month ago $126.7 million, the central bank reported on Friday (12/06). The amount decreased mainly influenced by oil and gas forex and other forex receipts also expenses for the payment of the government’ foreign debt.
The Bank said, the reserve is equivalent to financing 7.5 months of imports or 7.2 months of imports and payment of government foreign debt. Its also above the international adequacy standard of about three months of imports.
BI assesses that foreign exchange reserves are able to support the resilience of the external sector and maintain macroeconomic and financial system stability. Going forward, the central bank viewed the reserves to remain adequate, supported by stability and sound economic prospects.
The forex reserves movement are one factor influenced BI 7 days reverse repo rate (BI7DRRR). Recently, the policymaker hold BI-7DRR rate at 5 percent, deposit facility rate 4.25 percent and lending facility rate 5.75 percent.
At the same time, the central bank also relaxed the reserve requirement for commercial and sharia banks by 50 bps to 5.5 percent and 4 percent, respectively.
In the latest board meeting, BI’ governor Perry Warjiyo, said the policy make to boost the liquidity in the market. He also stated, “The policy was taken to maintain economy growth amid slowing global economy.”
He continued, through the policies, the central bank aimed to drive the loan growth and enlarge financing at the same time stabilizing the financial system. In addition, the policymakers wants to kept the countercyclical capital buffer at zero percent and buffer ratio of macro-prudential policy at 4 percent with repo flexibility at 4 percent.
Even some countries has relaxed its monetary policy by cutting the interest rate, it was not adequate to anticipate the slowdown of global economy growth, he adds. Going forward, Warjiyo saw that the global economy growth getting better, but still cautiously on the tension between the two largest economy in the world.
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