Indonesia’s Forex Reserves increased in December 2023

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Bank Indonesia (BI) reported a notable increase in foreign exchange (forex) reserves, reaching USD 146.4 billion as of December 2023, marking a 5.7% rise from USD 138.1 billion in November 2023.

Erwin Haryono, Assistant Governor of BI’s Department of Communication, highlighted that the upsurge in forex reserves primarily stemmed from tax and service income, along with foreign loans acquired by the government. Speaking at a press release in Jakarta on January 8th, Haryono emphasized that these reserves play a crucial role in bolstering the resilience of the external sector and maintaining macroeconomic stability, including the financial system.

Haryono underscored that the current level of forex reserves can cover 6.7 months of import or 6.5 months of import plus foreign loans, surpassing the government’s adequacy standard of approximately 3 months of import.

Reiterating the adequacy of the forex reserves, Haryono expressed confidence that they will continue to meet the country’s needs. He also noted that the economic outlook is more favorable, thanks to the government’s responsive policy mix.

“The government remains committed to maintaining macroeconomic and financial system neutrality to support growth and financial integrity,” he added.

Overall, BI’s record-high forex reserves stand as a testament to Indonesia’s strengthened economic position, providing a buffer against external shocks and affirming the country’s commitment to robust financial management.