Indonesia's Foreign Exchange Reserves Increased by 5.2% in 2020

Bank Indonesia (BI) recorded Indonesia's foreign exchange reserves at US$135.9 billion as of December 2020. This represents a 5.2% increase compared to the same period in 2019, which stood at US$129.2 billion.

These reserves are equivalent to 10.2 months of import financing or 9.8 months of import and government foreign debt payments. Furthermore, the foreign exchange reserves are above the international adequacy standard of three months of imports.

The central bank stated that the increase in foreign exchange reserves in 2020 was influenced by several factors, such as government foreign loan withdrawals, government global sukuk issuances, and tax receipts in foreign currency. Bank Indonesia is also optimistic that foreign exchange reserves will increase in 2021 due to government global bond issuances and tax receipts.

Generally, foreign exchange is defined as goods that can be used as a means of international payment. This means of payment can be foreign currency recognized worldwide or gold and securities in international payments.

(Read More: Indonesia's Foreign Exchange Reserves US$ 135.9 Billion in December 2020)

To date, there are at least 5 components of foreign exchange reserves: foreign currency, monetary gold, Special Drawing Rights (an international reserve asset created by the IMF), Reserve Position in the Fund (a country's foreign exchange reserves in the IMF account), and other receivables.

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