(Jakarta, 9th) The Bank of Indonesia has increased market intervention efforts to stabilize the local currency exchange rate, leading to the country's largest drop in foreign reserves in nearly two years in April.
The Bank of Indonesia issued a statement on Thursday (May 8) indicating that foreign reserves decreased by 4.6 billion USD (approximately 6 billion SGD) in April, falling to 152.5 billion USD, the lowest in five months, marking the largest monthly decline since May 2023. The central bank explained that the decline in reserves was mainly due to the government's repayment of foreign debt and responding to global exchange market uncertainties.
In early April, U.S. President Trump announced a 32% reciprocal tariff on Indonesian imports, causing the Indonesian Rupiah to plummet to a historical low of 1 USD to 16,970 Rupiah. Although the U.S. subsequently announced a 90-day delay in implementing the tariff to allow for trade negotiations, the Rupiah remained under pressure, having depreciated approximately 2.6% against the dollar this year, making it one of the worst-performing major currencies in Asia.
The Bank of Indonesia noted that the Rupiah has recently rebounded 2.8% from its low point, and intervention pressure has slightly eased. The central bank reiterated recently that the U.S. tariff hikes and rising tensions between India and Pakistan will exacerbate global market risks, and the central bank will continue to enter the market to stabilize the Rupiah.
The statement also emphasized that the current foreign reserves are sufficient to cover 6.4 months of import demand, remaining at a healthy level, adequate to maintain the stability of Indonesia's financial system.
The Bank of Indonesia issued a statement on Thursday (May 8) indicating that foreign reserves decreased by 4.6 billion USD (approximately 6 billion SGD) in April, falling to 152.5 billion USD, the lowest in five months, marking the largest monthly decline since May 2023. The central bank explained that the decline in reserves was mainly due to the government's repayment of foreign debt and responding to global exchange market uncertainties.
In early April, U.S. President Trump announced a 32% reciprocal tariff on Indonesian imports, causing the Indonesian Rupiah to plummet to a historical low of 1 USD to 16,970 Rupiah. Although the U.S. subsequently announced a 90-day delay in implementing the tariff to allow for trade negotiations, the Rupiah remained under pressure, having depreciated approximately 2.6% against the dollar this year, making it one of the worst-performing major currencies in Asia.
The Bank of Indonesia noted that the Rupiah has recently rebounded 2.8% from its low point, and intervention pressure has slightly eased. The central bank reiterated recently that the U.S. tariff hikes and rising tensions between India and Pakistan will exacerbate global market risks, and the central bank will continue to enter the market to stabilize the Rupiah.
The statement also emphasized that the current foreign reserves are sufficient to cover 6.4 months of import demand, remaining at a healthy level, adequate to maintain the stability of Indonesia's financial system.