Bank Indonesia (BI) reported Indonesia’s foreign exchange reserves in August 2022. The collected foreign exchange reached US$132.2 billion. This figure is exactly the same as the foreign exchange reserves in July 2022 which also reached US$132.2 billion.
The Executive Director of the Head of the BI Communications Department Erwin Haryono explained that the development of the foreign exchange reserve position in August 2022 was influenced, among other things, by tax and service receipts, and oil and gas foreign exchange receipts.
This is also influenced by the need for stabilization of the Rupiah exchange rate in line with the high uncertainty in global financial markets.
The foreign exchange reserve position is equivalent to financing 6.1 months of imports or 6.6 months of imports and servicing government external debt, and is above the international adequacy standard of around 3 months of imports.
Erwin emphasized that the central bank views the foreign exchange reserves as capable of supporting external sector resilience and maintaining macroeconomic and financial system stability.
BI assesses that foreign exchange reserves remain adequate, supported by stability, and maintained economic prospects, along with various policy responses to maintain macroeconomic and financial system stability to support the national economic recovery process.
For information, foreign exchange reserves are assets held by the central bank and monetary authorities, usually denominated in different reserve currencies.
The currency used in foreign exchange reserves is usually the currency that applies internationally, aka recognized in many countries such as the US dollar, euro, yen, yuan, and pound sterling.
The size of a country’s foreign exchange reserve position depends on various factors that influence it, such as exports, exchange rates, interest rates, and inflation.
For developing countries such as Indonesia, exports play an important role in national development, foreign exchange obtained from export activities will increase the country’s foreign exchange reserves which in turn can strengthen Indonesia’s macroeconomic fundamentals.
one of the government’s efforts to obtain foreign exchange from abroad by making loans to other countries and exporting the products of natural resources abroad. From these results, it can be used to increase state development funds
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