Indonesia's Foreign Exchange Reserves Hit Record US$144.8 Billion in August 2021, Supported by IMF Loan

Indonesia's foreign exchange reserves reached US$144.8 billion in August 2021, an increase from US$137.3 billion the previous month.

The increase in foreign exchange reserves is in line with the loan from the International Monetary Fund (IMF). This can be seen from the additional allocation of Special Drawing Rights (SDRs) amounting to 4.46 billion SDRs, equivalent to US$6.31 billion, received by Indonesia from the IMF.

The IMF increased the SDR allocation and distributed it to all member countries, including Indonesia proportionally in 2021. Bank Indonesia explained that this IMF measure was taken to support the resilience and stability of the global economy in the face of the impact of the Covid-19 pandemic. Furthermore, the IMF's support also aims to build confidence among economic actors and strengthen global foreign exchange reserves. This SDR allocation was distributed to IMF member countries free of charge.

Indonesia's foreign exchange reserves are equivalent to 9.1 months of import financing or 8.7 months of import and government foreign debt payments. Furthermore, Indonesia's foreign exchange reserves are above the international adequacy standard of around 3 months of imports.

Bank Indonesia assesses that these foreign exchange reserves are able to support the resilience of the external sector, maintain macroeconomic stability, and the financial system. In addition, the institution assesses that foreign exchange reserves remain adequate, supported by maintained economic stability and prospects, along with various policy responses to encourage economic recovery.