Indonesia's Foreign Exchange Reserves Grow 2.8% in September 2013
The central bank of Indonesia (Bank Indonesia) announced that Indonesia's foreign exchange reserves have increased slightly in September 2013. On 30 September, the reserves stood at USD $95.67 billion, a 2.88 percent increase from USD $92.99 billion one month earlier. The reserves in September are equivalent to 5.4 months of imports, or 5.2 months when servicing of government external debt is included. Recent US dollar demand for the import of oil is what put pressure on the reserves.
Besides the need to finance oil imports, the reserves have also declined in recent months due to central bank's efforts to support the weakening rupiah (by selling US dollars). However, the bank has ceased these efforts as it became too expensive to curb the depreciation of the currency. Between January and September 2013, the Indonesian rupiah fell about 17.7 percent against the US dollar. As such, it is one of the worst performing currencies in Asia.
US Dollar (USD) to Indonesia Rupiah (IDR) Exchange Rate:
| Source: Bank Indonesia
To support the rupiah, it will be important for Indonesia to tackle its current account deficit. In the second quarter of 2013, Indonesia's current account deficit reached 4.4 percent of the nation's gross domestic product (GDP). In the third quarter, Bank Indonesia expects its to moderate to 2.7 percent of GDP.
| 2008 | 2009 |
2010 | 2011 | 2012 | 2013² | |
| Foreign Exchange Reserves¹ |
51.6 | 66.1 | 96.2 | 110.1 | 112.8 | 95.7 |
¹ in billion USD dollar
² at end September 2013
Source: Bank Indonesia