Indonesia's foreign exchange reserves in March plunge US$9.4 billion

Indonesia's foreign exchange reserves in March plunge US$9.4 billion

Logo of Bank Indonesia. (Antara)

Jakarta (ANTARA) - Indonesia's official reserve assets stood at US$121 billion, as of March-end 2020, $9.4 billion lower, from the position of $130.4 billion recorded at the end of February 2020.

The position of official reserve assets was equivalent to finance 7.2 months of imports or seven months of imports and servicing government’s external debt, which is well above the international adequacy standard of three months of imports, Executive Director of the Bank Indonesia (BI) Communication Department Onny Widjanarko noted in a statement in Jakarta, Tuesday.

According to BI, the official reserve assets are sufficient to finance import and debt service payments as well as the need to stabilize the rupiah exchange rate

The decline in official reserve assets in March 2020 was influenced by factors including the government external debt payments and stabilization of the rupiah exchange rate amid extraordinary conditions owing to panic in global financial markets triggered by the rapid and widespread effect of the COVID-19 pandemic globally.

The fear has induced capital outflow and augmented exchange rate pressures on the rupiah, especially in the second and third week of March 2020.

Stabilization measures and policy mix reinforcement by BI as well as close coordination with the government and Financial Services Authority (OJK) have facilitated market conditions to gradually recover, and market mechanisms have resumed since the last week of March 2020.

BI views that the rupiah exchange rate as being relatively adequate and fundamentally undervalued and is expected to move stably and tend to appreciate to Rp15,000 per US dollar by the end of 2020.

In addition, BI will continue to maintain adequacy of reserve assets to bolster external resilience and preserve macroeconomic and financial system stability.
Related news: BI buoyant foreign exchange reserves to suffice in guarding rupiah

Related news: Indonesia's foreign exchange reserves at US$130.4 billion in February


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