Domination Of Domestic Investors In SBN Brings Personal Consequences: Foreign Exchange Reserves Increases

Illustration (Photo: Doc. Antara)

JAKARTA economic observer at the Institute for Development of Economics and Finance (Indef) Nawir Messi stated that the higher portion of domestic investors in the state securities instrument (SBN) has its own consequences. According to him, this assumption is reflected in the relatively sloping foreign exchange reserves.

Instead, Bank Indonesia acts as an investor who absorbs government debt securities significantly.

"This is a consequence of Bank Indonesia's very incentive intervention (buying SBN) in recent months," he said online to the media crew on Thursday, January 5.

According to Nawir's records, the value of Indonesia's foreign exchange reserves is still far behind Singapore, Thailand, India and South Korea.

"Except for Malaysia, our foreign exchange reserves are a little above them," he said.

Nawir explained that the foreign exchange, which tends to slope, is increasingly depressed by the indications of Indonesian exporters choosing to store their foreign exchanges compared to domestic ones.

Many people have been surprised in the last three or four years that Singapore has become the number one investor in Indonesia. In my opinion, this is the money that Indonesians are also kept in Singapore and then come here as foreign direct investment (FDI)," he explained.

Quoting a report reported by Bank Indonesia (BI), it was stated that the position of Indonesia's foreign exchange reserves at the end of November 2022 was US$ 134 billion. This figure increased compared to the position at the end of October 2022 which amounted to US$ 130.2 billion.

The central bank claims that foreign exchange reserves are equivalent to financing 5.9 months of imports or 5.8 months of imports and payment of government foreign debt.

"This is above the international adequacy standard of about three months of imports," said Head of the BI Communications Department Erwin Haryono some time ago.

As for Bank Indonesia's efforts to withdraw export funds parked abroad, the monetary authority has prepared special incentives for business actors.

"We will issue a new instrument where banks can fast on deposits of export proceeds (DHE) from exporters to Bank Indonesia with attractive market and interest rates or returns," said BI Governor Perry Warjiyo at the end of last year.