UOB Group’s Economist Enrico Tanuwidjaja and Junior Economist Agus Santoso review the latest FX reserves figures in Indonesia.

Key Takeaways

Indonesia’s foreign exchange reserves fell by USD2.2bn to USD134.9bn in Sep 2023. 

The latest reserves level was equivalent to financing 6.1 months of imports or 6 months’ worth of imports and external government debt servicing, well above the international adequacy standard of 3 months of imports.

The figure reaffirms that exports revenue in Sep is expected to be flattish. Some indicators we looked at in Sep were commodity prices declining and lower demand from India and China as Indonesia’s main trading partners. Going forward, we maintain our forecast of Indonesian FX reserves to remain in high levels of around USD135bn to USD145bn at the end of this year on the back of better outlook especially from coal demand and inflows into the bond market.