"We ensure that our foreign exchange reserves of $121 billion is more than sufficient to meet the needs," BI Governor Perry Warjiyo stated during an online press conference in Jakarta on Monday.
Warjiyo detailed the amount of the reduction comprising $2 billion to meet government debt that matures in March 2020 and $7 billion for efforts to stabilize the rupiah exchange rate.
Warjiyo stressed that BI had sought foreign exchange reserves of $121 billion that would be able to support imports, payments of foreign debts, and maintain the stability of the rupiah exchange rate.
"With the exchange rate moving stable and strengthening and the market mechanism going well, the need for BI’s intervention is decreasing," he pointed out.
However, Warjiyo pointed out that BI also had a second line of defense in the form of a bilateral swap agreement with China, worth $30 billion; Japan, $22.76 billion; Singapore, $7 billion; and South Korea, $10 billion.
"Although our foreign exchange reserves are more than sufficient, Bank Indonesia also has a second line of defense in case the need arises," he pointed out.
Warjiyo remarked that the second line of defense will serve to maintain the stability of the rupiah exchange rate and the Indonesian economy amid the outbreak of the novel coronavirus disease (COVID-19).
"This can be used to maintain the stability of the rupiah exchange rate and our economy, as it becomes an important pillar for us to restore the economy together in the future," he added. Related news: BI buoyant foreign exchange reserves to suffice in guarding rupiah
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