Adrian Wail Akhlas, Jakarta – Indonesia's foreign exchange (forex) reserves rose to US$129.2 billion in December, the highest level in 22 months, driven by inflows from the oil and gas sector and global bonds issuance, Bank Indonesia (BI) announced Wednesday.
The current reserves level, which indicated a $2.6 billion increase from the previous month, is enough to support 7.6 months of imports and 7.3 months of imports and payments of the government's short-term debt. It was above the international adequacy standards of about three months of imports.
The central bank deemed the current reserve level "strong enough" to support the country's resilience to external factors, as well as to maintain macroeconomic and financial system stability, BI spokesman Onny Widjanarko said in a statement.
"BI is of the view that the foreign exchange reserves are adequate, supported by stability and a positive outlook for the economy."
Bahana Sekuritas economist Satria Sambijantoro said BI had probably stockpiled its greenback disposal in the last two weeks of December at the time when emerging markets currencies appreciated.
"Although the government did not issue US dollar [denominated] bonds, something that the Finance Ministry normally does in December as pre-funding for next year's state budget, the foreign exchange reserves got a boost from BI's monetary operations and foreign inflows," Satria wrote in a note.
In December, he said, there were $465 million of net foreign exchange swaps drained by the central bank and $221.33 million of net foreign inflows.
"We expect the resilience of the rupiah, which appreciated 1.72 percent in December, to continue in 2020, paving the way for more piling up of foreign exchange reserves," he added.