Government Pays Foreign Debt, Foreign Exchange Reserves Depreciate 600 Million US Dollars

JAKARTA – Bank Indonesia (BI) reported that the position of Indonesia's foreign exchange reserves at the end of August 2023 was USD 137.1 billion.

Head of the BI Communication Department Erwin Haryono said this figure was slightly lower compared to the position at the end of July 2023 which amounted to USD 137.7 billion. However, he ensured that the amount of foreign exchange reserves owned by Indonesia was still at a high level.

"The decline in the position of foreign exchange reserves was influenced, among other things, by the payment of the government's foreign debt," he said in a written statement on Thursday, September 7.

Erwin revealed that the depreciation of foreign payment instruments was also driven by the need to stabilize the rupiah exchange rate.

"This step was taken in line with the increasing uncertainty in global financial markets," he said.

Erwin added that Indonesia's foreign exchange reserve position is equivalent to financing 6.2 months of imports or 6.0 months of imports and payment of government foreign debt.

"This is above the international adequacy standard of around 3 months of imports," he stressed.

Erwin said that Bank Indonesia assesses that existing foreign exchange reserves are capable of supporting the resilience of the external sector and maintaining macroeconomic and financial system stability.

"In the future, Bank Indonesia views that foreign exchange reserves will remain adequate, supported by maintained economic stability and prospects, in line with the policy mix response taken by Bank Indonesia in maintaining macroeconomic and financial system stability to support sustainable economic growth," he concluded.