Bank Indonesia's Foreign Exchange Reserves Sufficient to Finance 6.9 Months of Imports

Bank Indonesia (BI) recorded a decrease in foreign exchange reserves to US$118.3 billion (Rp1,713.75 trillion) at the end of July 2018, down US$1.53 billion from the previous month's US$119.8 billion. This decrease was influenced by government foreign debt payments that matured and efforts to stabilize the rupiah exchange rate amidst uncertainty in the global financial market.

Despite the decrease, BI's foreign exchange reserves are still sufficient to finance 6.9 months of imports or 6.7 months of imports and government foreign debt payments. This figure remains above the international adequacy standard of approximately 3 months of imports. The central bank considers these reserves sufficient to support external sector resilience and maintain macroeconomic and financial system stability.

Foreign exchange reserves held by the central bank have been declining over the past six months, since February 2018. Compared to the end of January, BI's foreign exchange reserves have shrunk by US$13.67 billion, equivalent to Rp197.98 trillion or 10.36%. The largest decrease in BI's foreign exchange reserves occurred in February, reaching US$3.92 billion or 2.97% from the previous month.