Bank Indonesia: Foreign Exchange Reserves at Record High in May
The central bank of Indonesia (Bank Indonesia) announced the country's foreign exchange reserves rose by USD $1.7 billion to reach the new record high of USD $124.95 billion at the end of May 2017. Growth of Indonesia's foreign exchange assets was attributed to foreign exchange receipts (mainly originating from tax revenues and government oil & gas export earnings), as well as to Bank Indonesia's foreign exchange bills auction.
These receipts more than enough to offset the use of foreign exchange for the repayment of government foreign debt and Bank Indonesia's maturing foreign exchange bills.
In a statement on the Bank Indonesia website the central bank added that the current reserve asset position adequately covers 8.9 months of imports or 8.6 months of imports and servicing of government foreign debt repayments, well above the international standards of reserves adequacy at three months of imports. Bank Indonesia is convinced Indonesia's official reserve assets are able to strengthen the resilience of the external sector and maintain the sustainability of the nation's economic growth.
The previous record for Indonesia's foreign exchange reserves was USD $124.6 billion (August 2011). After that record, Indonesia's foreign exchange assets slid significantly due to falling commodity prices and major pressures on the Indonesian rupiah exchange rate due to US monetary policy in the 2013-2015 period (Bank Indonesia defended the rupiah during the taper tantrum in 2013 by "burning" its foreign exchange reserves).
The Indonesian rupiah should get some support from this news. However, so far this morning the rupiah has been moving sideways against the US dollar due to the latter's strength as markets are expecting a US interest rate hike next week, while former FBI Director James Comey's testimony before the Senate on Thursday (08/06) is not expected to have a big and immediate impact on the Donald Trump administration.
Foreign Exchange Assets Indonesia:
