Indonesia's forex reserves leap following global bond issuance

JAKARTA, May 8 (Xinhua) -- The foreign exchange reserves (forex) of the Indonesian central bank edged up significantly in April after the issuance of global bonds, strengthening the lender to protect rupiah during the economic fallout caused by the COVID-19 pandemic.

The central bank's forex reserves jumped to 127.9 billion U.S. dollars in April from 121.0 billion U.S. dollars in March, spokesman for the central bank, Bank Indonesia, Onny Widjanarko, said on Friday.

"The hike in the forex reserves was primarily supported by the issuance of the government's global bonds," he remarked.

The spokesman pointed out that the forex reserves are sufficient to support 7.8 months of imports, or 7.5 months of imports and payment of the government short-term debts.

The figure was higher than the international threshold of three-month imports, according to the central bank's reports.

"The forex reserves are capable of supporting external resilience and maintaining the stability of the macro-economy and financial system," the spokesman said in a statement.

Bank Indonesia has pledged to maintain the rupiah stability during the global economic fallout due to the COVID-19 pandemic, support a pickup in business activities, and prioritize its key rate tool on the measure for the rupiah stability.

One of the global bonds issued by the government was Asia's first longest-maturation global bond which was issued last month during which the government raised 4.3 billion U.S. dollars.

Indonesian Finance Minister Sri Mulyani Indrawati said the cash raised will be partly used to help boost the foreign exchange reserves of Bank Indonesia which has been aggressively conducting intervention in the financial market during the global economic fallout due to the COVID-19 pandemic.

In March, Bank Indonesia spent 9.4 billion U.S. dollars of its reserves to conduct intervention in the financial market.


(Photo: VCG)