Foreign Exchange Reserves is Enough, BI Says

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  • TEMPO.CO, Jakarta - Bank Indonesia (BI) asserted that the current amount of foreign exchange reserves, which recorded at US$107.55 billion, is enough to stabilize the weakening Rupiah exchange rate. "Until now, we think that the foreign exchange reserves is enough to stablizie the Rupiah," said Perry Warjiyo, Deputy Governor of BI on Tuesday, August 25, 2015.

    Perry said that he had carried out several test cases on the availability of foreign exchange reserves during capital outflow. The result, according to Perry, the current amount of foreign exchange reserves is adequate.

    Nevertheless, Perry said that BI had provided an alternative solution to anticipate the decrease of foreign exchange reserves in the form of bilateral swap with several countries. "[BI] does have a second line of defense to maintain market confidence if necessary, not only the US$107 billion. Although we are certain that [the US$107 billion] is enough," said Perry.

    Meanwhile, Perry said that the market was overreacting toward The Federal Reserve's plan to increase its interest rate, which in turn causes excessive pressure against the Rupiah.

    Based on BI's JISDOR (Jakarta Interbank Spot Dollar Rate) currency rate recorded on Tuesday, August 25, 2015, the Rupiah continues to weaken to a level of Rp 14,067 per US Dollar.