Indonesia's foreign exchange reserves have fallen for a fifth consecutive month in May, underscoring the cost incurred by policymakers to stabilize the rupiah's exchange rate, following the currency's drop to a record low.
The central bank stated in an emailed release on Monday that the nation's foreign reserves decreased to $144.9 billion last month, marking the longest streak of monthly declines since 2018. The reduction was attributed to government repayments of external debt and the central bank's actions to support the rupiah amid heightened uncertainty in global financial markets.
The Indonesian rupiah weakened by 0.7% in early trading, hitting a new all-time low against the US dollar. Meanwhile, the yield on Indonesia's 10-year government bonds climbed further to 7.14%, reaching its highest level since April 2025. Influenced by declines across Asian stock markets, Indonesia's benchmark stock index fell by 2.5%.
The central bank has intensified its interventions in the currency and bond markets to bolster the rupiah, which has depreciated by approximately 8% so far this year. Foreign investors have withdrawn over $3.5 billion from Indonesian equities, and the Jakarta benchmark index has declined more than 30% year-to-date.
On Saturday, the central bank and the government pledged to work together to enhance foreign investor interest in Indonesian assets. The central bank plans to raise the interest rate on government deposits, a move aimed at reducing the government's borrowing costs and attracting greater capital inflows.
The central bank noted that Indonesia's foreign exchange reserves are sufficient to cover 5.5 months of imports and external debt repayments. It added that this level is adequate to ensure external resilience and the stability of the financial system.
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