Bank Indonesia deputy governor Budi Mulia acknowledged that the central bank spent some amount of foreign exchange to arrest the fall of the rupiah, which on Thursday broke the 9,200 level against the U.S. dollar.
Budi Mulia also said that the fall in the foreign exchange reserves was caused by the government's increased foreign exchange spending to pay its obligation related to the Muslim haj pilgrimage to Mecca.
"The decrease in foreign exchange reserves has nothing to do with the trade deficit in July," Budi was quoted as saying by Tempointeraktif.com on Friday.
Data at Bank Indonesia shows that the country's foreign exchange reserves hit a new record of US$60.56 billion as of the end of August, or enough to finance 4.7 months of import needs.
