Indonesia: FX Reserves climb to all-time highs in September – UOB

Economist at UOB Group Enrico Tanuwidjaja and Yari Mayaseti assess the latest FX reserves figures in Indonesia.

Key Takeaways

“Indonesia’s foreign exchange reserves rose further, hitting a new all-time high at USD146.9bn in September 2021; an increase by USD2.1bn from the previous month. The latest reserve level was equivalent to finance 8.9 months of import or 8.6 months of imports and servicing the government’s external debt.”

“The increase of reserve assets in September was attributable to tax and services receipts and the government’s external debt withdrawal. Going forward, we might see a moderate build-up in FX reserves underpinned by capital inflows, proceeds from exports, as well as other FX earnings, as the vaccination program continues and the global economy gradually recovers. Nevertheless, downside risks remain on the back of the ongoing uncertainty from COVID-19 developments and US Fed tapering among others, which may result in slower FX earnings and capital outflows.”