Indonesia’s foreign reserves suffer longest decline since 2018

[JAKARTA] Indonesia’s foreign-exchange reserves fell for a fifth straight month in May, underscoring the cost of policymakers’ efforts to steady the rupiah after its slide to a record low.

Reserves dropped to US$144.9 billion last month, marking the longest stretch of losses since 2018. The decline was due to the government’s external debt payments and the central bank’s measures to stabilise the rupiah amid high uncertainty in global financial markets, Bank Indonesia said on Monday (Jun 8).

The rupiah held earlier losses of 0.7 per cent as it continued falling to a new all-time low against the US dollar. Indonesia’s 10-year bond yields rose further to 26 basis points to 7.14 per cent, the highest since April 2025. The benchmark stock index held a 2.5 per cent decline amid a broad regional sell-off.

The drawdown comes as the central bank intensified intervention in currency and bond markets to support the rupiah, which has weakened about 8 per cent this year. Foreign investors have pulled more than US$3.5 billion from Indonesian stocks, as the benchmark Jakarta stock index tumbled more than 30 per cent this year.

Bank Indonesia and the government pledged on Saturday to join forces to bolster foreign investor appetite for Indonesian assets. The central bank plans to increase the interest paid on government deposits held with it, a move aimed at lowering the state’s borrowing costs and luring in more inflows.

Indonesia’s reserves are enough to cover 5.5 months’ worth of imports and foreign-debt servicing, Bank Indonesia said. That’s adequate to ensure external resilience and the stability of the financial system, it added. BLOOMBERG