INDONESIA’S FOREX RESERVES CONTINUE TO DECLINE IN OCTOBER 2015
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Jakarta, 25 Muharram 1437/7 November 2015 (MINA) – Bank Indonesia, the central bank, announced on Friday (06/11) that Indonesia’s foreign exchange reserves have fallen by US $1 billion to US $100.7 billion at the end of October 2015.
The decline was caused by foreign debt payments and efforts to stabilize the fragile rupiah. The Indonesia’s currency is sensitive to market expectations regarding looming higher US interest rates, Mi’raj Islamic News Agency reported, quoting Indonesia-Investments.com.
Bank Indonesia stated that the foreign exchange reserves at US $100.7 billion at the end of October 2015 can adequately cover 7.1 months of imports or 6.6 months of imports and servicing of government external debt repayment, which is well above the international standard of reserves adequacy (at three months of imports).
Currently, BI introduce new measures in an effort to increase the country’s foreign exchange (FX) supplies. BI economic and monetary policy executive director Juda Agung, the measures will include setting a new benchmark for FX forward selling transactions without underlying reasons.
An FX forward selling is a transaction in which a party agrees to sell a certain amount of FX at a specific time and at an agreed price. At the moment, such transactions can be conducted without underlying reasons, but only up to US$1 million per transaction.
“We are going to increase the maximum limit to $5 million per transaction,” Juda said .
He said the move would provide greater convenience for people or companies wanting to sell their FX, thus triggering higher inflows of foreign-denominated currencies into the money market. (T/R07/R01)
Mi’raj Islamic News Agency (MINA)
