"The reserve asset position was equivalent to financing of 7.4 months of imports or 7.2 months of imports and servicing of government external debt, well above the international standard of reserve adequacy of 3 months of imports," said the Executive director of the central bank`s communication department, Agusman, in a statement here on Friday.
Bank Indonesia felt the official reserve assets were enough to support external sector resilience and maintain macroeconomic and financial system sustainability.
The decline in the reserve assets in May was mainly due to the use of foreign exchange to repay government external debt and to stabilise the rupiah in the midst of high uncertainty in the global financial market.
Going forward, Bank Indonesia believed the official reserve assets would remain adequate, supported by the confidence in the domestic economy`s stability and the upbeat outlook and positive export performance.
Meanwhile, the Consumer Price Index (CPI) inflation in May 2018 remained controlled or within the targeted range of 3.5?1 per cent (year-on-year).
CPI inflation in May 2018 stood at 0.21 per cent (month-to-month), increasing compared to that in the previous month of 0.10 per cent (mtm) as Ramadan was approaching.
Despite the increase, CPI inflation in May 2018 was lower than the average CPI inflation during Ramadan in the previous four years of 0.63 per cent (mtm).
The month`s CPI increase was boosted by the rise in all inflation components according to the seasonal pattern, said Bank Indonesia. In May, CPI inflation had reached 1.30 per cent (ytd) or 3.23 per cent (yoy), lower than the previous month`s inflation of 3.41 per cent.
The controlled CPI inflation was backed by stable core inflation. Core inflation stood at 0.21 per cent (mtm), higher than the previous month`s 0.19 per cent, but lower than the average core inflation during Ramadan in the previous four years of 0.32 per cent (mtm).
The main commodities contributing to core inflation were beverages and apparel during Ramadan. Annually, core inflation stood at 2.75 per cent (yoy), higher than the previous month`s 2.69 per cent.
The controlled core inflation until May 2018 was closely related to the policies adopted by Bank Indonesia in directing the inflation expectation, including keeping the movement of the exchange rate according to its fundamentals, the BI statement said.
EDITED BY INE