Foreign Exchange Reserves Down Are Considered Imbas The Flow Of Foreign Funds Out Of The Indonesian Financial Market

JAKARTA - Indonesia's foreign exchange reserves position at the end of February 2025 reached 154.5 billion US dollars, or decreased compared to the position at the end of January 2025 of 156.1 billion US dollars.

Head of Bank Permata economist, Josua Pardede, said that the decline in foreign exchange reserves in February was due to a significant flow of foreign capital or outflow in the stock market, which reached around US$1.1 billion, causing a significant weakening of the rupiah.

"In February, there was an outflow, yes, especially in the stock market, if I'm not mistaken, there will be an outflow of 1.1 billion US dollars and if we look at it, there will also be a significant weakening of the rupiah," he told the media crew, Friday, March 7.

Therefore, Josua conveyed that stabilization steps from Bank Indonesia were needed so that they also affected the performance and level of foreign exchange reserves in February.

"But if we look at the general position of our Cadev, it's still relatively high," he explained.

Nevertheless, Josua estimates that by the end of this year, foreign exchange reserves will remain at a safe and sufficient level for payment of imports and government foreign debt.

"That Cadev's position will still be at a cofortable level, which is still safe. Still above in terms of benchmarks or benchmarking for import payments and also government foreign debt," he said.

Regarding the possibility of increasing foreign exchange reserves, Josua said that this relies heavily on incoming foreign flows in the financial market and the possibility of global bond issuance by the government.

"Of course we don't know yet what kind of government schedule, but if for example there are foreign flows or foreign capital flows entering," he said.

On the other hand, Josua said that the central bank policy, such as the ECB, which has just cut interest rates, and has a 50-base point rate reduction space by the Fed this year, could provide positive sentiment for developing countries.

"If it can have a positive impact, positive sentiment on emerging countries," he said.

Therefore, he is optimistic that this year's flow of foreign funds can still be maintained, so it is hoped that it can maintain a stable foreign exchange reserve level.