(April 8): Indonesia’s foreign-exchange (FX) reserves fell for a third straight month in March to the lowest level in nearly two years as the central bank stepped up market intervention to stabilise the falling rupiah.
Foreign reserves declined US$3.7 billion to US$148.2 billion, the lowest since July 2024, due to Bank Indonesia’s (BI) steps to stabilise the currency and the government’s external debt repayments, the central bank said in a statement on Wednesday. The stockpile shrank by US$8.3 billion in the first three months of this year.
The rupiah declined 1.3% last month as the war in the Middle East drove up the cost of oil imports and revived long-term worries about fiscal slippage. BI said on Tuesday that it is continuing to intervene in the markets to maintain exchange rate stability, which is its “top priority”.
“The reserves underscore BI’s priority of mitigating rupiah depreciation pressures,” said Lavanya Venkateswaran, economist at Oversea-Chinese Banking Corp. “The news of the temporary US-Iran ceasefire will provide some relief.”
The rupiah strengthened the most in seven months against the dollar on Wednesday as the greenback fell following news of the US-Iran ceasefire.
See also: Malaysian importers used ceasefire window to buy dollar — Citigroup
Indonesia’s current dollar stockpile can cover 5.8 months of imports and foreign debt servicing. The stash is adequate to support external sector resilience and maintain macro economic and financial system stability, the central bank said.
Still, pressures from the state budget and current account deficits from sustained higher oil prices could persist, OCBC’s Venkateswaran said, predicting the central bank will maintain its key interest rate unchanged for the rest of the year.
Uploaded by Felyx Teoh
