Foreign Exchange Reserves Eroded by External Debt Payments, Drop to US$148.2 Billion

The government faces a policy dilemma with no truly comfortable options. Indonesia’s foreign exchange reserves came under renewed pressure at the end of March 2026, mainly due to the government’s need to service external debt amid persistently high global uncertainties. Bank Indonesia recorded the reserves position dropping to US$148.2 billion, down from US$151.9 billion at the end of February 2026. This decline is equivalent to approximately Rp2,522.5 trillion, assuming an exchange rate of Rp17,021 per US dollar. Head of Bank Indonesia’s Communication Department, Ramdan Denny Prakoso, explained that the primary pressure stemmed from the government’s external debt payments. Additionally, movements in the reserves were influenced by other factors, including the government’s global bond issuance, tax and service receipts, and policies to stabilise the rupiah exchange rate. According to him, these stabilisation measures were taken in response to rising volatility in global financial markets. Although experiencing a decline, Bank Indonesia assesses the current reserves position as still safe. The value is equivalent to financing 6.0 months of imports or 5.8 months of imports and government external debt payments. This figure remains above the international adequacy standard, which is generally around three months of imports. Bank Indonesia also emphasises that the current reserves are still capable of supporting external sector resilience, while maintaining macroeconomic stability and the national financial system. Looking ahead, the central bank is confident that external resilience will remain intact, supported by foreign capital inflows aligned with positive investor perceptions of Indonesia’s economic prospects and the attractiveness of investment returns. As a follow-up step, Bank Indonesia will continue to strengthen coordination with the government to maintain external stability and promote sustainable economic growth.