Rupiah Strengthens, BI's December Foreign Exchange Reserves Reach Rp 1,736 Trillion

Bank Indonesia (BI) reported that Indonesia's foreign exchange reserves increased by US$3.44 billion (2.94%) in December 2018 to US$120.66 billion, equivalent to Rp1,736 trillion at an exchange rate of Rp14,390 per US dollar. This marks the third consecutive monthly increase since October, totaling US$5.8 billion over the past three months. These reserves are sufficient to finance 6.5 months of imports and government debt payments.

However, compared to the end of the previous year, BI's foreign exchange reserves decreased by US$9.54 billion (7.3%) and by US$11.3 billion (8.6%) from their peak of US$131.98 billion reached in January of the previous year. Outflows of foreign funds from the domestic financial market caused rupiah fluctuations, prompting the central bank to intervene to prevent excessive weakening.

Foreign exchange reserves reached their lowest level of US$114.84 billion throughout the previous year in September due to the rupiah's depreciation against the US dollar. The Fed's interest rate hikes and concerns about the impact of the trade war caused the rupiah to weaken to over Rp15,200 per US dollar in October of the previous year.