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Indonesia’s foreign exchange reserves jump $5.7b

Indonesia’s foreign exchange reserves jump $5.7b

JAKARTA: Bank Indonesia’s foreign-exchange reserves jumped the most since April 2012 last month, giving the central bank more scope to manage the exchange rate in the face of external headwinds.

The stockpile grew by $5.7 billion to $105.9 billion, the monetary authority said in a statement. That came after Bank Indonesia posted the figures on its website earlier on Friday before removing them. The gain is the largest since April 2012 and the first increase following a nine-month run in which the reserves fell 13 percent.

The jump in the reserves reduces concern that Bank Indonesia will run out of ammunition should it wish to defend the rupiah amid rising U.S. interest rates and growing worries that the weakening yuan will spur a regional currency war. Only the Philippine peso and Thailand’s baht have fared better than the Indonesian exchange rate this week among Asian emerging markets.

“It probably means a period of stability for the rupiah,” said Wai Ho Leong, a senior regional economist at Barclays in Singapore. “And indeed if you look at the last few days through the China turmoil, I think it’s been one of the better performers regionally. It’s been a bedrock of relative stability against expectations.”

The rupiah advanced 0.1 per cent to 13,910 a dollar in Jakarta, paring its loss this week to 0.9 per cent, prices from local banks show.