Jakarta. Indonesia's foreign exchange reserves dropped to $128.06 billion at the end of February from the country's highest of $131.98 billion a month earlier, Bank Indonesia said in a statement on Wednesday (07/03).
The central bank has been selling the reserves to keep the rupiah exchange rate in line with its fundamentals, following the US dollar rally in the past weeks.
The greenback strengthened after US Federal Reserve chairman Jerome Powell expressed optimism about the country's economic recovery, leading to expectations of fund rate hikes.
The rupiah has weakened about 2.27 percent against the dollar in February, reaching 13,800 per dollar last week — its lowest rate since 2016.
Still, February's reserve level is sufficient to cover 8.1 months of Indonesia's imports, or 7.9 months of imports and servicing of the government's external debt repayments, the central bank said. It is also above the international standard of three months of imports.
"Bank Indonesia sees the foreign exchange reserves as adequate to support resilience against external risks, in line with strong domestic economic outlook and positive export performance," the bank's spokesman, Agusman, said in the statement.
Bank Indonesia said it will maintain a sufficient level of forex reserves to support the stability of the economy and financial system, adding that there will be an additional influx of foreign money from the government's $3 billion Islamic bonds issuance this month.