Jakarta. Indonesia's foreign exchange reserves shrunk by $4.1 billion last month as the central bank sold some of the reserves to pay foreign debt and to prop up the value of the rupiah.
The reserves fell to $103.6 billion in May from $107.7 billion a month earlier, according to a statement issued by Bank Indonesia on Tuesday (07/05).
Bank Indonesia executive director Tirta Segara said the drop was caused mainly due to the "seasonal" high public demand for foreign exchange to pay debts and also due to the central bank's intervention to stabilize the rupiah exchange rates against the US dollar.
"Bank Indonesia expects the drop in foreign exchange reserves in May 2016 to be temporary as the global financial market has begun to be conducive," Tirta said.
The reserves "adequately cover" 7.9 months of imports, or 7.6 months of imports and foreign debt payments, Tirta said in the statement.
The rupiah has strengthened 3 percent against the dollar so far this year on the back of capital inflows in Indonesia's bonds and the stock market. The rupiah traded at Rp 13,375 against the greenback on Tuesday, according to Bank Indonesia's Jakarta Interbank Spot Dollar Rate.