Indonesia: Positive start of the year for FX reserves – UOB


Economist at UOB Group Enrico Tanuwidjaja reviewed January’s report of FX reserves in Indonesia.

Key Quotes

“Indonesia’s foreign exchange reserves jumped by USD2.5bn to USD131.7bn in January, almost beating January 2018’s record of USD132bn. The latest reserve level was equivalent to 7.8 months of import financing or 7.5 months of imports, and payments of government external debt; which is well above the international adequacy standard of around 3 months of imports.”

“The increase in January’s reserves was attributable to the sale of global bonds by the government, amounting about USD3.0bn last month, to finance its budget deficit in 2020. In addition, the reserve accumulation was underpinned by the oil & gas foreign exchange receipts and other foreign exchange receipts. Bank Indonesia (BI) assessed that foreign exchange reserves will remain adequate, supported by the stability and solid domestic economy prospect. Moreover, the near-record reserves will provide Indonesia’s central bank more firepower to cope with the market volatility arising from the current outbreak of novel coronavirus (2019-nCoV) and its impact on the economy.”

“Going forward, we might see a further moderate build-up in FX reserves on the back of easing trade tensions between US-China and the soon-to be released Omnibus Law in taxation and job creation, in which may result in higher investor confidence and turning into more capital inflow. Indonesia’s stable and low inflation is also another key factor as it helps the central bank in maintaining the exchange rate stability. Risks surrounding this view would be capital outflows, retreating to save-haven assets (e.g. 2019-nCoV outbreak last longer than expected).”

 

FXStreet Indonesian Site - new domain!
Access it at www.fxstreet-id.com

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD rebounds to 1.0650 on renewed USD weakness

EUR/USD rebounds to 1.0650 on renewed USD weakness

EUR/USD gained traction and rose to the 1.0650 area in the early American session on Tuesday. Disappointing housing data from the US seem to be weighing on the US Dollar, helping the pair stretch higher.

EUR/USD News

GBP/USD climbs above 1.2450 after US data

GBP/USD climbs above 1.2450 after US data

GBP/USD extended its recovery from the multi-month low it touched near 1.2400 and turned positive on the day above 1.2450. The modest selling pressure surrounding the US Dollar after dismal housing data supports the pair's rebound.

GBP/USD News

Gold retreats to $2,370 as US yields push higher

Gold retreats to $2,370 as US yields push higher

Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.

Gold News

XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference

XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference

XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court. 

Read more

US outperformance continues

US outperformance continues

The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.

Read more

Forex MAJORS

Cryptocurrencies

Signatures