JAKARTA, Aug. 7 (Xinhua) -- Indonesia's foreign exchange (forex) reserves surged to a record high in July after the issuance of global bonds, giving more firepower to the central bank to deal with the market volatility as the lender aims to use its key rate to help shore up the economy which has been dashed by the virus pandemic.
Indonesia's foreign exchange reserves jumped to 135.1 billion U.S. dollars in July from 131.7 billion U.S. dollars in June, the Indonesian central bank, Bank Indonesia, said in a statement on Friday.
The government has issued a 9.9 billion U.S. dollar global bonds since January to help finance the efforts to respond to the novel coronavirus outbreak. Part of the bonds were the sales of dollar-denominated Islamic bonds in June.
The forex reserves are sufficient to support nine months of imports, and 8.6 months of imports and payment of the government short-term debts.
The figures exceed the international threshold of three months of imports.
"Bank Indonesia sees that the forex reserves are capable of supporting external resilience and maintaining the macro-prudential and financial system stability," the lender said in the statement.
The hike in the reserves is in line with the rapid capital inflows into the country, according to the spokesman of Bank Indonesia, Onny Widjanarko.
Rupiah has also been relatively stable as of late as investors hunt emerging markets' risk assets which have become more attractive recently.
Besides, the country has also logged net exports in several months this year, data from the Indonesian Central Agency of Statistics showed.
Under such conditions, the benign inflation gives more rooms to Bank Indonesia to make its loosening policy persist on months ahead to accelerate the economy.
The Southeast Asian biggest economy decelerated 5.32 percent in the second quarter and has been striving to escape further contraction in the third quarter, in the hope it could avoid a deep recession. Enditem
