Indonesia' foreign exchange reserves stood at US$126.4 billion in August - Photo by Bank Indonesia.

JAKARTA (TheInsiderStories) – Indonesia’ foreign exchange (forex) reserves stood at US$125.9 billion in July, the central bank (BI) reported on Wednesday (08/7). The amount slightly higher than the previous month, which was worth $123.8 billion.

The position is equal to 7.3-month import financing or 7-month import and payment of government foreign debt. “It is also above of international standard in 3-month import,” said BI’ Governor Perry Warjiyo.

The increasing of forex reserves in July was caused by oil and gas foreign exchange proceed as well as withdrawal of government foreign debt. The forex reserves are also able to support the external sector resilience and macroeconomy and finance stability, it said.

On July 2019, Bank Indonesia has lowered it’s 7 days reverse repo (BI-7DRR) rate by 25 bps to 5.75 percent during its July meeting. This is the first interest rate cut since September 2017, in an attempt to support growth amid low inflation expectations.

The overnight deposit and lending facilities were also trimmed by the same amount to 5.00 percent and 6.50 percent, respectively.

Warjiyo said the policy was pursued in line with the continued low forecast of inflation and the need to push the momentum of economic growth, amid conditions of uncertainty in the declining global financial market and controlled external stability.

“The monetary operations strategy is still directed at ensuring the availability of liquidity in the money market and strengthening the transmission of accommodative monetary policy,” he said.

Macroprudential policies remain accommodative to encourage bank lending and expand financing for the economy. Payment system policies and financial market deepening are also being strengthened to support economic growth, he adds.

Going forward, the central bank sees open space for accommodative monetary policy in line with the low inflation forecast and the need to push for further economic growth momentum, the policymakers said.

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