The foreign exchange reserves at the central bank of Indonesia (Bank Indonesia) increased about USD $3 billion to USD $105.6 billion at the end of April 2014, the highest level in 15 months, particularly due to export earnings of government-owned oil and gas exporters. Bank Indonesia said that the current position of forex reserves is equivalent to 6.1 months of imports or 5.9 months of imports and servicing external debt (well above the international standard of three months of imports). Today, the central bank's Board of Governors Meeting is held.
Bank Indonesia considers the growth in forex reserves a favourable impact of efforts to bolster external sector resilience and maintain sustainable economic growth in Indonesia.
Today (08/05/2014), Bank Indonesia will release the new benchmark interest rate (BI rate) after the Board of Governors Meeting. Most analysts expect that the current rate of 7.50 percent will be maintained as inflation (7.25 year-on-year in April 2014) and the country's current account deficit (USD $4 billion, or two percent of the country's GDP in the fourth quarter of 2013) still need to moderate further, although the latter will require more structural solutions instead of monetary policy only (through the higher interest rate environment). On Friday (09/05), the current account figure of Q1-2014 is expected to be released.
Indonesia's Foreign Exchange Reserves 2008-2014:
¹ in billion US dollar
² at end April 2014
Source: Bank Indonesia