Enrico Tanuwidjaja, economist, and Haris Handy of UOB Group assessed the latest figures on Indonesia’s foreign reserves.
“Indonesia’s foreign exchange reserves increased from $3.4 billion to $135.1 billion in July 2020, the highest point ever reached, surpassing the previous record of $132 billion in January 2018. The last reserve point is equivalent to nine months of import financing or 8.6 months of imports and invoices for government external debt. »
“The accumulation of foreign exchange reserves in July driven by the issuance of global bonds and the withdrawal of loans from foreign governments. The government raised a hundred billion yen ($930 million) through the issuance of five-part samurai bonds to help control the deficit budget and fund the reaction to the coronavirus pandemic in early July. In the future, we may see an extra moderate accumulation of foreign exchange reserves through capital inflows, export revenues, and other foreign exchange income. In addition, larger market situations from 3 months ago will also reduce the need for IB to carry out market interventions”.
The EUR/USD is quoted above 1.19, expanding its profits. The dollar fell after Fed President Powell announced a replacement policy that would keep interest rates down longer. U.S. knowledge is observed.
The USD/JPY falls to about 106 after Japanese Prime Minister Shinzo Abe announced his resignation due to fitness issues. Uncertainty about the economy triggers safe haven flows to the yen.
The GBP/USD pair is quoted closer to 1.33 in 8 months. The dollar is receding after Fed President Powell reported long-term low rates. The governor of BOE, Bailey, speaks later.
Gold regained positive traction on Friday in a strongly presented tone around the USD. Good mood in the market, a strong recovery in US bond yields can limit the rise.
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