by Elisa Valenta
Indonesia's foreign exchange reserves (FX reserves) surged to $127.9 billion in April following the issuance of global bonds. The increase in the FX reserves means more room for the central bank to protect the rupiah during the economic fallout caused by the COVID-19 pandemic according to Bank Indonesia.
The current reserves level, an increase from $121 billion in March, is estimated to cover 7.5 months of imports and the payment for the government’s short-term debts. It is also above the international adequacy standard of three months’ worth of imports.
Bank Indonesia has pledged to maintain the rupiah stability during the global economic fallout due to the COVID-19 pandemic, support a pickup in business activities, and prioritize its key rate tool on the measure for the rupiah stability.
One of the global bonds issued by the government was Asia's longest-dated dollar bond of $4.3 billion which was issued last month. Earlier, Finance Minister Sri Mulyani Indrawati said the cash raised will be partly used to help boost the foreign exchange reserves of Bank Indonesia which has been aggressively conducting intervention in the financial market. In March, Bank Indonesia spent $9.4 billion of its reserves for market intervention.
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