Economists Estimates Indonesia's Foreign Exchange Reserves Will Continue To Acquire In The Future

Foreign Exchange Reserves (Photo: Antara)

JAKARTA - Bank Mandiri Chief Economist Andry Asmoro said the position of Indonesia's foreign exchange reserves at the end of May 2024 was 139 billion US dollars. This foreign exchange reserve increased by 2.8 billion US dollars compared to the position in April 2024 of 136.2 billion US dollars.

According to Andry, tax and service revenues as well as the issuance of global government bonds affect the increase in the position of foreign exchange reserves.

In addition, the position of foreign exchange reserves is equivalent to financing 6.3 months of imports or 6.1 months of imports and paying government foreign debt, and is above the international adequacy standard of around 3 months of imports.

Andry said foreign exchange reserves would remain adequate in the future. Although the downward trend in foreign exchange reserves in recent months is in line with the increasing turmoil in global financial markets, which is driving capital flows out of Indonesia and increasing pressure on the rupiah exchange rate against foreign currencies.

"Although external pressure will continue because of the Fed's policy which is still Higher for Longer, BI stated that foreign exchange reserves will remain adequate with the support of national economic stability," he explained in his statement, Friday, June 7.

Andry explained that the policy mix pursued by the Government and the Central Bank will be able to encourage economic growth. The domestic economy will be supported by consumption and strong investment.

In addition, Bank Indonesia also continues to pursue a triple intervention policy and optimizes pro-market instruments to maintain financial market stability.

"This policy is expected to attract foreign funds back into the domestic market," he said.

Andry estimates that the rupiah exchange rate will reach the range of Rp. 15,813 per US dollar at the end of 2024, and the domestic economy is estimated to grow solidly by 5.06 percent in 2024.