National Foreign Exchange Reserves Reached US$137.2 Billion as of December 2022

Yuan and US Dollar

Indonesia’s foreign exchange reserves in December 2022 recorded an increase compared to November 2022. The exchange reserves in December 2022 reached US$137.2 billion.

Bank Indonesia noted that this figure had increased compared to the position at the end of November 2022 of US$134.0 billion.

Head of the Bank Indonesia Communication Department Erwin Haryono, Friday (6/1), said, “The increase in the position of US$137.2 billion in foreign reserves in December 2022 was influenced, among other things, by tax and service revenues, as well as withdrawals from government loans.”

He said the position of foreign exchange reserves is equivalent to financing 6.0 months of imports or 5.9 months of imports and servicing the government’s foreign debt.

According to him, the position of foreign exchange reserves in December 2022 is above the international adequacy standard of around 3 months of imports. Bank Indonesia assesses that these foreign exchange reserves are able to support external sector resilience and maintain macroeconomic and financial system stability.

“Going forward, Bank Indonesia views that foreign exchange reserves will remain adequate, supported by stability and maintained economic prospects, along with various policy responses in maintaining macroeconomic and financial system stability to support the process of national economic recovery,”

However, the source of this increase again does not reflect the strength of exports. In fact, Indonesia has scored a trade balance surplus for 31 consecutive months.

For 31 consecutive months, the export value touched US$ 609.1 billion or more than Rp 9,500 trillion. The Central Statistics Agency (BPS) noted that Indonesia recorded a surplus from May 2020 to November 2022. Unfortunately, this large export value has not made foreign exchange reserves fat.

Instead of increasing foreign exchange savings, the value is far from the record US$ 144.78 billion set in August 2021.

For information, foreign exchange reserves are assets held by central banks and monetary authorities, usually denominated in different reserve currencies. The currency used is usually the currency that applies internationally, aka recognized in many countries, such as US dollars, euros, yen, yuan, and pounds.

Furthermore, even though Indonesia’s exchange reserves are abundant, the Ministry of Finance has just withdrawn new debt denominated in United States (US) dollars of US$ 3 billion or Rp. 47 trillion (exchange rate of Rp. 15,635/US$) on January 5, 2023.

Chief Economist for Bahana Sekuritas, Satria Sambijantoro, said that the current government’s rupiah cash position is very secure and even in excess, as can be seen from the high Silpa and SAL values at the end of 2022.

Until now, the Directorate General of Risk Financing and Management (DJPPR) has not responded regarding the issuance of these bonds.