Indonesia: FX Reserves bounced in April – UOB

Economist Enrico Tanuwidjaja and haris Handy at UOB Group assessed the latest FX Reserves figures in Indonesia.

Key Quotes

“Indonesia foreign exchange reserves increased by USD6.9bn to USD127.9bn in April 2020 after a sharp drop of USD9.4bn in March, as Bank Indonesia (BI) stepped up market intervention to safeguard the value of the rupiah following the coronavirus (COVID-19) pandemic. The latest reserve level was equivalent to 7.8 months of import financing or 7.5 months of imports, and payments of government external debt. This is well above the international adequacy standard of around 3 months of imports.”

“The increase in April’s foreign exchange reserves was driven by the government’s global bond issuance. In addition, rupiah strengthened by almost 9% from end-March to end-April as the global USD crunch alleviated, hence, reducing BI’s need to intervene. Going forward, BI considers that the official reserve assets position was able to support the external sector resilience and maintain macroeconomic and financial system stability.”