Indonesia's foreign exchange reserves have been stable amidst economic turmoil, including the threat of import tariffs from the United States. Business concerns had risen after the announcement of the 32% tariff in April, which was later revised to 19% in July and took effect on August 7, 2025.
Based on an official statement from Bank Indonesia (BI) on Thursday (7/8/2025), the position of foreign exchange reserves in July 2025 was recorded at US$ 152.0 billion, slightly down from the position at the end of June 2025 of US$ 152.6 billion.
Executive Director of BI's Communication Department Ramdan Denny Prakoso said the slight decline was influenced by the government's external debt payments as well as the rupiah exchange rate stabilization measures taken by Bank Indonesia in response to the high uncertainty in global financial markets.
"The position of foreign exchange reserves is considered very adequate because it is equivalent to financing 6.3 months of imports, above the international standard of 3 months of imports," said Ramdan, Thursday (7/8/2025).
The position of foreign exchange reserves is relatively stable even in the midst of the turbulent trade tariff decisions made by US President Donald Trump. Since he first raised the issue of changing trade tariffs last April, international trade was immediately affected. Many exports and imports have been held back as they await the certainty of the amount of tariffs that Trump will set.
However, Indonesia's foreign exchange reserves from April 2025 to July 2025 were in a relatively stable position. In April, the value of foreign exchange reserves was at US$ 152.46 billion, in May at US$ 152.48 billion, in June at US$ 152.56 billion, and in July at US$ 151.98 billion.
Bank Mandiri Chief Economist Andry Asmoro highlighted the stable position of Indonesia's foreign exchange reserves from April 2025 to July 2025. The stability of foreign exchange reserves was influenced by tax revenues and service sector revenues amid government external debt payments, as well as intervention to stabilize the rupiah exchange rate amid increasing global financial market uncertainty.
"Nevertheless, the position of foreign exchange reserves remains high and shows the resilience of Indonesia's external sector," said Asmo, Andry Asmoro's nickname.
Trend ahead
Asmo said, Indonesia's foreign exchange reserves are expected to remain strong along with support from the trade balance surplus and the prospect of capital inflows to emerging markets. Indonesia itself has recorded a trade balance surplus for 62 consecutive months.
Economist at the Institute for Economic and Community Research at the University of Indonesia (LPEM UI), Teuku Riefky, predicts that Indonesia's foreign exchange reserves will be under pressure until the end of the year.
He further explained global economic factors as the cause of the decline in foreign exchange reserves.
"If we look at the Trump Tariff, of course there will be pressures on the value of the rupiah so as to reduce Indonesia's foreign exchange reserves," he told Suar, (7/8/2025).
On the other hand, he estimates that BI will intervene by using foreign exchange reserves to maintain the rupiah exchange rate.
Chairman of the Indonesian Exporters Association (GPEI) Benny Soetrisno said that although the difference between exports and imports is currently shrinking, Indonesia's trade balance is still in surplus. He also added that the current foreign exchange reserves are also strengthened by a policy that requires the retention of foreign exchange proceeds from exports of natural resources (SDA) for 12 months.
However, the mandatory DHE storage policy is not appropriate for exporters of processing industries. This is because many raw materials for the manufacturing industry still have to be supplied from imports. Cash from export revenues is immediately rotated to buy raw materials which are then immediately used for production needs.
This policy is more appropriate for DHE from natural resources. This is because DHE from this sector is possible to be deposited in the domestic financial system.
However, potential future pressures remain to be watched, especially from the US tariff policy that sets an import tariff of 19% on products from Indonesia, which could affect national export performance. Leading commodities such as coal and CPO are expected to remain the main pillars of Indonesia's external sector resilience.
Benny also underlined the importance of rupiah stability for entrepreneurs. According to him, rupiah stability supported by strong foreign exchange reserves allows entrepreneurs to calculate exchange rate risks more accurately and avoid losses.
"Our hope is that the rupiah is stable, the ups and downs don't have to be too high, don't have to be too low, so we can calculate the exchange rate risk," he told SUAR (7/8/2025).
To increase the resilience of businesses, Benny suggested the government lower the cost of hedging, an instrument used to maintain exchange rate certainty. However, he assessed that hedging costs in Indonesia are currently still too expensive.
