RI's gross forex assets total $20.39b
JAKARTA (JP): Bank Indonesia, the central bank, announced yesterday that the country's gross foreign assets totaled US$20.39 billion as of Jan. 15, down from $27.56 billion as of last September.
This was the first time the central bank defined the country's official foreign reserves as gross foreign assets, or simply called foreign assets -- the net amount of foreign currency assets available to the central bank.
Previously the official foreign exchange reserves reported by the central bank did not include foreign exchange deposited by commercial banks as a compulsory foreign exchange reserve requirement or export drafts.
Bank Indonesia director Miranda S. Gultom said in a statement that the inclusion of all foreign exchange assets available to the central bank for the country's foreign exchange reserves was in accordance with international practices.
"As already known, gross foreign assets are foreign exchange reserves based on an internationally practiced concept of the IMF's SDDS (Special Data Dissemination Standards), which Indonesia also follows," Miranda said.
According to the International Monetary Fund (IMF), Miranda said, foreign exchange reserves were foreign exchange assets available to the monetary authority.
Minister of Finance Mar'ie Muhammad said late last year at a hearing with the House of Representatives Commission VIII for state budget and finance that the government deliberately did not include $5 billion of the country's foreign assets in the reported official foreign exchange reserves because of prudential considerations.
He said the $5 billion in assets, which were not reported by the central bank, were mostly illiquid assets, such as bonds and T-bills.
The country's $5 billion in assets was revealed to the public when the IMF announced last October that the $23 billion first- line bailout package arranged for Indonesia included $5 billion in Indonesian foreign assets.
Australian economist Ross H. McLeod recently criticized such a policy.
McLeod argued that since confidence in the rupiah depended partly on the level of Indonesian foreign reserves, the central bank's policy of hiding some reserves from the public's view might also have contributed to speculation.
The following is the development of the country's gross foreign assets and official foreign exchange reserves (rid):
Period Gross foreign assets Official reserves
(all figures in millions of U.S. dollars)
-----------------------------------------------------------
End of Dec. 1993 18,823.0 12,352.2
End of Dec. 1994 17,415.8 13,157.9
End of Dec. 1995 18,786.5 14,674.2
End of Dec. 1996 25,528.6 19,125.0
1997
End of March 26,611.5 19,872.5
End of June 28,854.2 21,083.7
End of Sept. 27,558.6 20,523.5
Dec. 15 22,194.4 18,010.0
End of Dec. 21,418.2 17,427.2
1998
Jan. 15 20,385.7