JAKARTA: The central bank of Indonesia (Bank Indonesia) announced that the country’s foreign exchange reserves rose USD $4.7 billion to the level of USD $127.76 billion at the end of July 2017. Growth of forex assets was primarily attributed to foreign exchange receipts, including the government’s issuance of global bonds, tax revenues and government oil & gas export proceeds. Lastly, the auction of Bank Indonesia foreign exchange bills also added forex receipts.
Meanwhile, Indonesia’s foreign exchange receipts were higher than its usage of foreign exchange reserves (primarily for repayment of government debt, while part of reserves were also needed to settle Bank Indonesia’s maturing foreign exchange bills).
The current forex reserves position can adequately cover 9.0 months of imports or 8.7 months of imports and servicing of government foreign debt repayments, well above the international standards of reserves adequacy at three months of imports.
In a statement on its official website the central bank said the nation’s foreign exchange reserves are able to strengthen the resilience of the external sector and maintain the sustainability of Indonesian economic growth.
Indonesia’s Q2-2017 economic growth was rather disappointing at 5.01 percent (y/y). The figure was released on Monday (07/08). However, last week Bank Indonesia Governor Agus Martowardojo already expressed his commitment to ease monetary policy in a bid to boost economic growth if Indonesia’s Q2-2017 GDP data would be disappointing.
