Indonesia’s Devisen Decreased after Four Consecutive Months of Growth

Foreign Exchange Reserves

Indonesia’s devisen, foreign exchange reserves, have decreased, after four consecutive months of growth.

Bank Indonesia (BI) reported that the position of foreign exchange reserves at the end of October 2021 reached 145.5 billion US dollars. This is decreased compared to the value at the end of September 2021 (146.9 billion US dollars, the highest position in history).

Head of the BI Communications Department Erwin Haryono said it was equivalent to financing 8.5 months of imports or 8.3 months of imports and servicing government foreign debt This also was above the international adequacy standard of around 3 months of imports.

BI also assessed that this condition be able to support external sector resilience and maintain macroeconomic and financial system stability.

Erwin explained that the decline in the position of foreign exchange reserves in October 2021 was influenced, among other things, by the payment of the government’s foreign debt.

“Going forward, Bank Indonesia views foreign exchange reserves as adequate, supported by stability and maintained economic prospects, along with various policy responses to encourage economic recovery,” he said, stated in Kompas news.

Foreign exchange reserves is an asset 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. In a simpler sense, foreign exchange reserves are assets held in reserves by the central bank in foreign currency. In Indonesia, these assets are kept by Bank Indonesia.