Indonesian Forex Reserves Rise in December 2016

Indonesia’s forex reserves rise to 116.4 billion US dollars.

Jakarta, 11 Rabiul Akhir 1438/10 January 2017 (MINA) – The central bank of Indonesia (Bank Indonesia) announced that the nation’s foreign exchange reserves climbed to USD $116.4 billion at the end of December 2016, up from USD $111.5 billion one month earlier.

The growth was attributed to foreign exchange receipts, primarily stemming from the issuance of government global bonds debt securities, the withdrawal of government foreign loans, tax revenues and oil & gas export proceeds, that all surpassed the use of foreign exchange for government external debt repayments and Bank Indonesia’s maturing foreign exchange bills, Indonesia-investments.com reported Tuesday.

Indonesia’s foreign asset position at end-December adequately covers 8.8 months of imports or 8.4 months of imports and the servicing of government external debt repayments.

This is well above the international standards of reserves adequacy at three months of imports.

In a statement that was released on the website of Bank Indonesia Executive Director of Communication Department Tirta Segara said the lender of last resort considers this position safe and is able to strengthen the resilience of the external sector and maintain the sustainability of Indonesian economic growth.

The rupiah experienced a volatile November and December 2016. First Indonesia’s currency depreciated heavily (against the US dollar) after the surprise victory of Donald Trump in the 2016 US presidential election.

Later in November it recovered sharply on a global relieve rally. But when the US Federal Reserve decided to raise its key interest rate in mid-December the rupiah started to depreciate rapidly again.

So far in 2017, however, the Indonesian rupiah has shown a strengthening trend. (T/RS05/RS01)

Mi’raj Islamic News Agency (MINA)