Indonesia central bank says foreign exchange reserves at $53.7 billion

Indonesias central bank posted $53.7 billion in foreign exchange reserves as of Friday, taking into account proceeds from the finance ministrys recent $3 billion global bond issue, the central bank governor said. Bank Indonesia (BI) said on Wednesday that its foreign exchange reserves amounted to $50.6 billion, as proceeds from the global bond had not yet been included.
Central Bank Governor Boediono also said Indonesian assets should remain attractive, despite recent interest rate cuts by the central bank, but did not elaborate. The central banks foreign exchange reserves have been declining in the past several months, which traders said was because it has sold dollars in the market to support the rupiah currency. The rupiah has lost about 8 percent against the dollar so far this year, and more than 20 percent against the dollar since the start of October when the crisis hit Indonesia.
"I think the amount that we have is adequate. We have additional funds from the government worth $3 billion so, as of today, our foreign exchange reserves are around $53.7 billion," Boediono told reporters.
Indonesia sold the global bonds last week, the biggest global bond out of Asia in over five years, to help finance a budget deficit that is forecast at 2.5 percent of GDP this year. "In my opinion, our rate is still attractive for those who want not only a return, but a good return," despite recent interest rate cuts by the central bank, Boediono said.
He said he expects demand for Indonesian assets to improve once financial markets stabilise. He did not elaborate. Bank Indonesia slashed its benchmark interest rate on March 4 by a bigger-than-expected 50 basis points to 7.75 percent, the lowest level since the rate was introduced in 2005. Deputy Governor Hartadi Sarwono said on March 5 that there was still room to cut the interest rate, as the central bank uses inflation rate as a key factor in its monetary policy and Indonesias inflation rate in 2009 is seen trending down.
February annual inflation came in at 8.6 percent, the slowest pace since March 2008, and Bank Indonesia forecast that annual inflation would approach the lower end of its 5-7 percent inflation target this year. Separately, Senior Deputy Governor Miranda Goeltom told reporters that the central bank was discussing a bilateral swap agreement with Australia. She did not elaborate.