Indonesia's Forex Reserves as of March 2020 Shrinked to USD 121 Billion

JAKARTA.  Central Bank of Indonesia ( Bank Indonesia/BI) recorded Indonesia's foreign exchange (forex) reserves as of March 2020 decreased by USD 9.4 billion to USD 121 billion from its position as of February 2020.This decline was driven by repayment of government's external debt and intervention by BI during this March, to maintain rupiah exchange rate stability.

The intervention was carried out by the monetary authority to keep the Garuda currency remained  stable amidst the pressures of condition on the financial market due to the Corona Virus Disease (Covid-19) pandemic. Based on Jakarta Interbank Spot Dollar Rate (JISDOR) data, the average exchange rate of the rupiah against the United States Dollar (USD) in March was IDR 15,194.57 per USD, whereas from 2 March to 31 March, the Garuda currency has depreciated by IDR 1,954 per  USD.

According to BI, the current rupiah exchange rate is fundamentally undervalued, and is expected to move steadily which tends to strengthen towards IDR 15,000 per USD by the end of 2020.Therefore, BI will continue to maintain the foreign exchange reserves' condition.

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As for this forex reserves position, Indonesia is considered still sufficient to finance the import needs and government's external debt for a period of 7 months.This condition is still above the international standard of forex reserves adequacy which is 3 months of import and government's external debt financing plus the need for exchange rate stabilization.

Tax Rate 

Meanwhile, based on the Decree of the Minister of Finance (Keputusan Menteri Keuangan/KMK) number 16 / MK.10 / 2020 the exchange rate of rupiah for the purposes of taxation against the USD from April 8 to April 14 is pegged at the level of IDR 16,509 per USD. This rate is higher than the tax rate in the previous period (last week) of IDR 164 per USD.

Whereas when compared to the Garuda currency tax rate against a number of other currencies, the average also weakened, such as against the Australian Dollar, British Pound, Euro Area of the European Union, Japanese Yen and Chinese Renminbi.

The tax rate is intended for taxpayers who wish to complete their tax obligations, but they make records in a currency other than rupiah. Though, tax obligations can only be settled in rupiah currency.