Jakarta, CNBC Indonesia – Indonesia’s foreign exchange reserves (cadev) skyrocketed in July, surpassing the all-time record highs reached more than 1.5 years ago. After a sharp fall in March, Cadev Indonesia climbed in 4 consecutive months. One of the triggers for Cadev’s skyrocketing last month was publishing global bond.
Bank Indonesia (BI) reported that Indonesia’s foreign exchange reserves at the end of July 2020 amounted to US $ 135.1 billion. It jumped sharply compared to the previous month which was US $ 131.7 billion. The highest record of foreign exchange reserves was US $ 132 billion which occurred in January 2018.
“The position of foreign exchange reserves is equivalent to 9 months of import financing or 8.6 months of imports and payment of government foreign debt, and is above the international adequacy standard of about 3 months of imports. Bank Indonesia assesses that foreign exchange reserves are able to support external sector resilience and maintain stability macroeconomic and financial system, “said BI’s written statement, Friday (07/08/2020).
In March, Indonesia’s foreign exchange reserves were eroded at US $ 9.4 billion until the end of March’s position was at US $ 121 billion, which is the lowest level since May 2019.
At that time, the rupiah exchange rate experienced severe turmoil, collapsed to Rp 16,620 / US $, the weakest since the 1998 monetary crisis. So the need for intervention to stabilize the rupiah became very large, the cadev was finally eroded.
After March, the storm passed, the rupiah began to stabilize and even strengthen, so that the need for intervention became minimal, foreign exchange reserves continue to climb. If you look at the position from the end of March to July, Indonesia’s cadev recorded an increase of US $ 14.1 billion.
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