Highlights December’s Forex Reserves
In December 2018, Indonesia posted the surge in forex reserves to reach USD120.6 billion. The figure was much higher than that of USD117.2 billion in November 2018. In fact, it was the third hikes for three consecutive months and the highest figure since May 2018.

Bullish Domestic Markets and Rupiah Appreciation
Much robust domestic financial & capital transactions and the bullish domestic markets were the potent drivers for the climbing-higher forex reserves in December. The bullish domestic markets were reflected in the Indonesian government’s success to sell sovereign global bonds worth USD3 billion in December 2018. The government spent the proceeds from the sale of sovereign global bonds to cushion deficits of the 2019 state budget (APBN) whose value was estimated to hit 1.84% of GDP.

Another to such supporting drivers, the rupiah hitting the all-time high since the last 6 months was the catalyst soaring December’s forex reserves higher. In addition, the positive global sentiments, e.g. the Fed’s dovish statements and a way more benign trade war between the U.S. and China supported the rupiah appreciation.

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