The foreign exchange reserves rose thanks to the growing surplus of the country`s balance of payment in the third quarter of 2011, the chief of Bank Indonesia`s public relations bureau, Difi A Johansyah, said here on Thursday.
However, the Board of Bank Indonesia Governors at its meeting on Thursday predicted that the country`s balance of payment would record a lower surplus than that of the previous quarter.
Imports were expected to grow at a faster pace due to the growing domestic economic activities and therefore, pressure on the current transactions would tend to increase.
After all, the pressure could be dealt with thanks to a surplus of capital and financial transactions although they would also come under pressure because of unfavorable global conditions.
The central bank noted that the rupiah`s exchange rate would tend to strengthen albeit at a limited pace. In August 2011, the local unit strengthened slightly by an average of 0.05 percent to a level of Rp8,525 per dollar with declining volatility although it had come under pressure because of global sentiments following worldwide fears of the prospects of the US and European economies.
It said strong domestic economic fundamentals and interesting yields would still contribute to the rupiah`s strengthening.
Difi said the central bank would continue to monitor developments in the rupiah`s exchange rate and ensure adequate liquidity funds in rupiah and foreign currencies to stabilize the domestic market.(*)
Editor: Heru Purwanto
Copyright © ANTARA 2011
