Indonesian Foreign Exchange Assets Fall On Stabilization of IND Rupiah

Indonesian Foreign Exchange Assets Fall On Stabilization of IND Rupiah

Indonesian foreign exchange reserves are seen to be fallen from a record highest of US Dollar 131.98 billion in January to US Dollar 128.06 billion in the month of February 2018. A statement that was released in the official website of Bank Indonesia also known as central bank of Indonesia reported this decline in reserves can be attributed to the utilization of foreign exchange in order to repay the external debt of government as well as in an attempt to stabilize the Indonesian rupiah exchange rate.

Beginning from late January this year, the Indonesian rupiah is experiencing a severe pressure ahead of one more forthcoming hike of interest rate in United States of America. This hike was expected in the end of March 2018. Recent positive economic data of United State and a Hawkish tone in that statement was made by Jerome Powell, recently appointed Chairmen of Federal Reserve, are the behind market participants’ increasing expectations of one more Rate hike in Federal Funds.

On 25th of January, the Indonesian Rupiah still remained at IDR 13,290 per American Dollar. But, on 28th February, it had declined to IDR 13,750 per American dollar. As calculated this was a 3.4 % declined. Central Bank of Indonesia has selling the part of their foreign exchange reserves to support the rupiah.

Besides the effort of stabilizing the Indonesian Rupiah, foreign exchange reserves of Indonesia also declined because of the lower foreign currency terms deposits at the central Bank of Indonesia, which is in line with the necessity of residents to repay the foreign currency liabilities.

As reported by the central Bank of Indonesia, foreign reserve assets of the country at the end of February 2018 are enough to fund around 8.1 or 7.9 months of country’s imports and servicing of external debt repayments of government. Well above international standards of reserve adequacy at 3 months of country’s import.

Thus, Central bank of Indonesia stresses that the exisiting reserve assets stayed adequate in order to support the external resilience, particularly when considering the economic growth outlook of Indonesia as well as export performance outlook of the country both look positive. In addition to this, there will be an additional inward foreign exchange receitps restricting by the Islamic Bonds issued by the government, also known as Global Sukuk. They have planned the issuance of this bond at USD 3.00 billion in the month of March this year.

Indonesian foreign exchange reserves are seen to be fallen from a record highest of US Dollar 131.98 billion in January to US Dollar 128.06 billion in the month of February 2018. A statement that was released in the official website of Bank Indonesia also known as central bank of Indonesia reported this decline in reserves can be attributed to the utilization of foreign exchange in order to repay the external debt of government as well as in an attempt to stabilize the Indonesian rupiah exchange rate.

Beginning from late January this year, the Indonesian rupiah is experiencing a severe pressure ahead of one more forthcoming hike of interest rate in United States of America. This hike was expected in the end of March 2018. Recent positive economic data of United State and a Hawkish tone in that statement was made by Jerome Powell, recently appointed Chairmen of Federal Reserve, are the behind market participants’ increasing expectations of one more Rate hike in Federal Funds.

On 25th of January, the Indonesian Rupiah still remained at IDR 13,290 per American Dollar. But, on 28th February, it had declined to IDR 13,750 per American dollar. As calculated this was a 3.4 % declined. Central Bank of Indonesia has selling the part of their foreign exchange reserves to support the rupiah.

Besides the effort of stabilizing the Indonesian Rupiah, foreign exchange reserves of Indonesia also declined because of the lower foreign currency terms deposits at the central Bank of Indonesia, which is in line with the necessity of residents to repay the foreign currency liabilities.

As reported by the central Bank of Indonesia, foreign reserve assets of the country at the end of February 2018 are enough to fund around 8.1 or 7.9 months of country’s imports and servicing of external debt repayments of government. Well above international standards of reserve adequacy at 3 months of country’s import.

Thus, Central bank of Indonesia stresses that the exisiting reserve assets stayed adequate in order to support the external resilience, particularly when considering the economic growth outlook of Indonesia as well as export performance outlook of the country both look positive. In addition to this, there will be an additional inward foreign exchange receitps restricting by the Islamic Bonds issued by the government, also known as Global Sukuk. They have planned the issuance of this bond at USD 3.00 billion in the month of March this year.

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