Jakarta: Indonesia's official reserve assets at the end of May 2019 amounted to USD120.3 billion, remain sufficiently high despite lower than USD124.3 billion at the end of April 2019.
The official reserve assets position was equivalent to finance 6.9 months of imports or 6.7 months of imports and servicing government’s external debt, and well above the international standard of reserve adequacy of 3 months of imports.
"Bank Indonesia considers that the official reserve assets position can support the external sector resilience and maintain macroeconomic and financial system sustainability," the central bank said in a written statement released on Thursday.
The decline in the reserve assets in May 2019 was mainly influenced by the obligation of government external debt repayments and banks’ foreign currency placement reduction in Bank Indonesia as to anticipate foreign currency liquidity needs regarding the cycle of dividend payments for several foreign companies and ahead of the Eid al-Fitr long holiday.
Going forward, Bank Indonesia considers the official reserve assets remain adequate supported by the stability and upbeat outlook of the domestic economy.
Solid national economic growth was recorded at 5.07 percent (yoy) in the first quarter of 2019, pointing to maintained domestic economic performance despite retreating from 5.18 percent (yoy) in the fourth quarter of 2018.
Seasonal factors at the beginning of the year as well as the impact of weaker-than-expected global economic gains contributed to the moderate economic downturn in Indonesia.
Economic growth in the first quarter of 2019 was primarily driven by domestic demand on the back of consumption by non-profit institutions serving households (NPISH) and households.
NPISH consumption growth accelerated to 16.93 percent (yoy) in the reporting period from 10.79 percent (yoy) in the three months to December 2018, buoyed by spending on preparations for the 2019 General Election.
Household consumption also remained solid as a consequence of controlled inflation, rising incomes and higher consumer confidence, notwithstanding slight moderation from 5.08 percent (yoy) to 5.01 percent (yoy) in the first quarter of 2019.