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, Bank Indonesia (BI) communications department director Junanto Herdiawan said in a statement here on Monday.
BI considers the official reserve assets position to be able to support the external sector resilience and maintain macroeconomic and financial system sustainability.
The decline in the reserve assets in September 2018 was mainly due to government external debt repayment and rupiah stabilization amidst high global financial market uncertainty.
Going forward, BI considers the official reserve assets to remain adequate, supported by confidence in stability and the upbeat outlook for the domestic economy as well as positive export performance.
The Indonesian currency rupiah lost more value in inter-bank transaction on Monday morning trading at the level of Rp15,183 per US dollar from Rp15,150 earlier.
Economist from the Samuel Aset Manajemen, Lana Soelistianingsih, stated that an increase in the yield of the US. bonds drew more funds to the US market, giving greater strength to the US dollar.
"The yield on the US government`s 10-year bonds rose to 3.22 percent or the highest since May 2011," Soelistianingsih remarked.
She revealed that the rise in the yield of the US government bond followed the reaction of the market players over a decline in unemployment rate in the world`s largest economy to 3.7 percent in September.
However, BI will likely move to prevent the rupiah from falling deeper in value, he explained, predicting that rupiah will hover at the level of 15,180-15,190 per dollar.
Meanwhile, senior analyst of CSA Research Institute Reza Priyambada elaborated that the rising trend of the oil price in the world market and shrinking foreign exchange reserve contributed to rupiah weakening.
"Indonesia needs much dollar to finance oil imports resulting in further decrease in the country`s foreign exchange reserve," Priyambada pointed out.
Reporter: Azis Kurmala
Editor: Yosep Hariyadi
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