JAKARTA, Oct 07 (Reuters): Indonesia's foreign exchange reserves dropped by about $3.1 billion in September, partly due to currency market intervention, Bank Indonesia (BI) said.
Indonesian currency rupiah continued to trade near its weakest in over 20 years last week.
A broad retreat by investors from emerging markets, high oil prices and concerns over potential fallout from an escalating trade war between the United States and China all contributed to the pressure on the rupiah over recent weeks.
The currency lost nearly 2.0 per cent, and hit 15,190 to the dollar on Thursday, its lowest in more than 20 years, though it closed slightly stronger on Friday at 15,175.
Indonesia's reserves stood at $114.8 billion at the end of September, equal to six-and-a-half months of imports, BI said in a statement, still far higher than the 3-month international adequacy standard, but representing a 13 per cent decline from $132 billion in January.
The September reserves level "is able to support the external sector resilience and maintain macroeconomic and financial system stability", BI said.
Governor Perry Warjiyo earlier on Friday confirmed that BI has been intervening to support the rupiah, though he stressed that BI was also also undertook smoothening operations when trade became lumpy.
This week, the governor said local interest rates must be raised ahead of the US Federal Reserve to avoid "drastic" outflows, in a sign that BI may lift rates further before a widely expected Fed rate hike in December.
The central bank has increased interest rates five times since mid-May, by a total of 150 basis points, to maintain the attractiveness of Indonesian assets for foreign investors.
