Jakarta. Foreign exchange reserves in Indonesia dropped by $3.8 billion in January, after the government paid foreign debts and interest on global bonds, the country's central bank said in a statement on Friday.
The reserve shrunk to $102.1 billion at the end of January, down from $105.9 billion at the end of December.
Arbonas Hutabarat, director of communication at Bank Indonesia, said the reserve is enough to cover 7.5 months of imports or 7.2 months of imports and government debt payments. International standard dictates a country should maintain reservea at a level sufficient for three-months of imports.
The central bank has done little prevent the weakening of the rupiah in the past year as it attempts to reign in imports and speculative foreign debt leaving the country with private business in the wake of the US Federal Reserve rate increase.
The rupiah has strengthened 1 percent so far this year on the back of a fresh influx of foreign capital in Indonesia's bonds and stock market, as investors respond to increasing stability after the long expected Fed benchmark rate increase of 25 basis points.