Reserves Adequate to Stabilize Rupiah

Jakarta (Antara Bali) - Bank of Indonesia (BI) stated that the current amount of national foreign exchange reserves, which reached US$ 107.55 billion, is adequate to stabilize the rupiah which continued weakening lately.

"Until now, the foreign exchange reserve of US$107 billion is still safe enough to stabilize the rupiah," Deputy Governor of BI Perry Warjiyo said here on Tuesday.

He said, BI has conducted a wide variety of test on foreign exchange reserves in order to face the capital outflows, and the foreign exchange reserve is currently still considered adequate.

In addition, said Warjiyo, BI provides another alternative form of bilateral swap cooperation with a number of countries to anticipate the reduction in foreign exchange reserves.

"We have second line of defense to give confidence to the market if necessary, not just providing the US$ 107 billion," he said.

Related to the strengthening of the US dollar which is in line with the increase of funds rate planned by the federal, Warjiyo assessed that the market reaction tend to be exaggerated so as to give pressure on the rupiah.

"The weakening of the rupiah has been overshoot, but that is the conditions which faced globally," Warjiyo said.

Based on the exchange rate of Jakarta Interbank Spot Dollar Rate (JISDOR) BI on Tuesday (Aug 25), the rupiah weakened to Rp14.067 per US dollar compared to the previous day of Rp13.998 per US dollar. (WDY)