We ensure that the foreign exchange reserves are more than sufficient. We admit that with the exchange rate pressure being quite high last week and in the previous week, undeniably, the foreign exchange reserves had declinedJakarta (ANTARA) - Bank Indonesia (BI) Governor Perry Warjiyo has made assurance that the country had adequate foreign exchange reserves to oversee the stabilization of the rupiah exchange rate amid pressure over the coronavirus outbreak.
"We ensure that the foreign exchange reserves are more than sufficient. We admit that with the exchange rate pressure being quite high last week and in the previous week, undeniably, the foreign exchange reserves had declined," Warjiyo stated at a press conference in Jakarta on Thursday.
The BI governor acknowledged that the pressure on the exchange rate in the past fortnight had led to a decline in the foreign exchange reserves though it is still sufficient for conducting a triple intervention in the financial market: stabilizing the rupiah in the Domestic Non-Deliverable Forward (DNDF) and spot markets as well as purchasing Government Bonds (SBN) on the secondary market along with interventions in the foreign exchange market.
"That is adequate to support our efforts to stabilize the rupiah exchange rate, including triple intervention, stabilizing the rupiah in the Domestic Non-Deliverable Forward (DNDF) and spot markets, as well as buying government bonds (SBN) on the secondary market in addition to interventions in the foreign exchange market," he remarked.
Furthermore, Warjiyo noted that BI had a currency swap agreement with several other central banks to support foreign exchange reserves.
"We also have a second line of defense, in the form of bilateral swaps with many central banks," he revealed.
Warjiyo noted that bilateral agreements, such as with China, were valued at US$30 billion; Japan, $22.7 billion; and Singapore, $10 billion, as well as with Australia and other central banks.
"We also communicate with the US central bank to strengthen bilateral swap cooperation," he remarked.
Indonesia's foreign exchange reserves at the end of February 2020 were recorded at $130.4 billion, or stayed high, albeit lesser than $131.7 billion at the end of January 2020.
Executive Director of the BI Communication Department Onny Widjanarko stated that the latest foreign exchange reserves were equivalent to financing 7.7 months of imports or 7.4 months for imports and the payment of the government’s foreign debt.
"It is also above the international adequacy standards of around three months of imports," he pointed out.
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