Indonesia’s foreign exchange reserves fell by USD1.8bn from Sep to USD133.1bn in Oct 2023, as it continued its declining trajectory in 3 consecutive months and recorded a decline of USD4.1bn from its position in Dec 2022. 

The latest reserves level was equivalent to financing 6.1 months of imports or 5.9 months’ worth of imports and external government debt servicing, well above the international adequacy standard of 3 months of imports. 

The figure represented a decline in exports revenue in Oct which was expected to record a deeper contraction and capital outflow due to heightened global uncertainty. Going forward, we expect that more new and competitive instruments including SRBI, SVBI and SUVBI could attract stronger inflows into Indonesia. Hence, 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 CPO prices and higher inflows into Indonesia’s bond market.