IMF Intervention Thickens Indonesia's Foreign Exchange Reserves To USD 144.8 Billion, More Debt?

Illustration. (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) reports that the position of Indonesia's foreign exchange reserves at the end of August 2021 was recorded at USD 144.8 billion.

Head of the BI Communications Department Erwin Haryono said the book increased compared to the position at the end of July 2021 of USD 137.3 billion.

"The increase in foreign exchange reserves in August 2021 was mainly due to the additional allocation of Special Drawing Rights (SDR) of 4.46 billion SDR or approximately USD 6.31 billion received by Indonesia from the IMF (International Monetary Fund)”, he said as reported by the official website, Tuesday, September 7.

According to Erwin, in 2021 the IMF will increase the allocation of SDR and distribute it to all member countries, including Indonesia proportionally according to their respective quotas.

"This is aimed at supporting the resilience and stability of the global economy in dealing with the impact of the COVID-19 pandemic, building the confidence of economic players, and also to strengthen global foreign exchange reserves", he said.

Erwin ensured that the facilities received by Indonesia were not accompanied by any obligations.

"The SDR allocation is distributed to IMF member countries at no cost", he stressed.

To note, Special Drawing Rights or SDR is an international reserve asset that is used to strengthen the foreign exchange reserves of IMF member countries.

SDR itself is determined based on four international currencies, namely the euro, yen, pound sterling, and US dollar which can be exchanged for currencies that can be used freely.

For information, Bank Indonesia is not the only time to release information if Indonesia's foreign exchange reserves are supported by the SDR. At least in 2015, the monetary authority had published that the Republic of Indonesia had implemented the Special Drawing Rights scheme to strengthen foreign exchange reserves.

"Going forward, Bank Indonesia views foreign exchange reserves as adequate, supported by stability and maintained economic prospects, along with various policy responses to promote economic recovery", Erwin concluded.