Indonesia: Bank Indonesia in talks with US, China on currency swaps

• Bank Indonesia (BI) is in talks with the US Federal Reserve about potential currency swaps, while also preparing bilateral swaps with central banks from China to Australia as it consolidates ways to aid the nation’s COVID-19 battle.
• BI Governor Perry Warjiyo said that Indonesia’s foreign exchange (forex) reserves as the central bank’s “first line of defense” were “adequate”.
• At USD130.4bn in Feb 20, Indonesia’s dollar reserves are enough to cover 7.7 months of imports, well above the healthy international standard of three months.
• “But we can also announce that we have a second line of defense, which are bilateral swaps with a number of central banks,” Perry said.
• He cited a USD30bn agreement with China, USD22.7bn with Japan, around USD10bn with Singapore and an undisclosed amount with Australia and other central banks.
• BI has been stabilizing the rupiah through its “triple market intervention” measures, focusing on the foreign exchange spot market, domestic non-deliverable forward (DNDF) market and secondary bond markets as the rupiah depreciated around 15% ytd.
• BI pledged to stabilize the rupiah at IDR15,000 per US dollar by end-2020, although the government has projected the rupiah will hover around IDR17,500 to IDR20,000 under the worst-case scenario of the COVID-19 pandemic being prolonged.

External Link : https://www.thejakartapost.com/news/2020/04/02/bank-indonesia-in-talks-with-us-china-on-currency-swaps.html