ID :
28852
Thu, 11/06/2008 - 23:14
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Shortlink :
http://m.oananews.org//node/28852
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RI FOREX RESERVES SUFFICIENT FOR OVER FOUR MONTHS : BI OFFICIAL
Jakarta, Nov 6 (ANTARA) - Indonesia's foreign exchange reserves are currently not in a precarious condition as they are still sufficient to finance its need for imports over a period of more than four months, a Bank Indonesia (BI or central bank) official said.
"The position of US$ 51 billion is quite good compared to what it was a few years ago. In terms of our monthly need for imports, it is enough for more than four months," Hartadi A Sarwono, BI deputy governor, said here Thursday.
Referring to the central bank's actions in intervening in the money market to maintain the rupiah's exchange rate by releasing dollars, causing a drain on the country's foreign exchange reserves, Sarwono said this was not only done by Indonesia but also by other countries.
"All countries consider such action appropriate since the US dollar is undergoing a significant contraction," he said.
BI was also releasing dollars to help the business community which usually need dollars to pay debts maturing towards the end of the year, he said.
In addition, the central bank had also lowered the minimum amount of foreign exchange liquidity banks were required to have so that part of the foreign exchange reserves of general banks deposited at BI would come free.
"The decrease (in the country's foreign exchange reserves) has happened while earnings from exports to build up the foreign exchange reserves have also dropped due to the downturn in the world crude price," he said, adding this had been occurring over the past few months in all countries in the region.
Sarwono said Indonesia's foreign exchange reserves were in a safe position at least until a new equilibrium was reached.
"The new equilibrium will eventually cause adjustments or a decrease in imports since the world economy has slowed down and the prices of export commodities have declined," he said.
Meanwhile, economist Tony A. Prasetiantono said, in his view, the country's foreign exchange reserves were now almost in a critical condition, and therefore, BI should be more careful in tapping them.
"Our foreign exchange reserves are now enough for only four months, meaning they amount to US$ 44 billion. Therefore, BI should not be too aggressive in intervening in the money market," he said.
He said under the present conditions, market operations and an interest rate increase by the central bank would not be effective to help the local currency to strengthen.
"What we need now is a 100-percent guarantee scheme (blanket guarantee) such as Singapore and Malaysia have already provided," he said.
"The position of US$ 51 billion is quite good compared to what it was a few years ago. In terms of our monthly need for imports, it is enough for more than four months," Hartadi A Sarwono, BI deputy governor, said here Thursday.
Referring to the central bank's actions in intervening in the money market to maintain the rupiah's exchange rate by releasing dollars, causing a drain on the country's foreign exchange reserves, Sarwono said this was not only done by Indonesia but also by other countries.
"All countries consider such action appropriate since the US dollar is undergoing a significant contraction," he said.
BI was also releasing dollars to help the business community which usually need dollars to pay debts maturing towards the end of the year, he said.
In addition, the central bank had also lowered the minimum amount of foreign exchange liquidity banks were required to have so that part of the foreign exchange reserves of general banks deposited at BI would come free.
"The decrease (in the country's foreign exchange reserves) has happened while earnings from exports to build up the foreign exchange reserves have also dropped due to the downturn in the world crude price," he said, adding this had been occurring over the past few months in all countries in the region.
Sarwono said Indonesia's foreign exchange reserves were in a safe position at least until a new equilibrium was reached.
"The new equilibrium will eventually cause adjustments or a decrease in imports since the world economy has slowed down and the prices of export commodities have declined," he said.
Meanwhile, economist Tony A. Prasetiantono said, in his view, the country's foreign exchange reserves were now almost in a critical condition, and therefore, BI should be more careful in tapping them.
"Our foreign exchange reserves are now enough for only four months, meaning they amount to US$ 44 billion. Therefore, BI should not be too aggressive in intervening in the money market," he said.
He said under the present conditions, market operations and an interest rate increase by the central bank would not be effective to help the local currency to strengthen.
"What we need now is a 100-percent guarantee scheme (blanket guarantee) such as Singapore and Malaysia have already provided," he said.
