Indonesia’s foreign exchange (forex) reserves increased to US$135.1 billion in July, the highest level ever, following the government’s move to issue global bonds, Bank Indonesia (BI) announced Friday.

The current reserves level, an increase from $131.7 billion in June, is estimated to be sufficient to support 8.6 months of imports and payments of the government’s short-term debts.

“BI is of the view that the foreign exchange reserves are adequate, supported by stability and a positive outlook for the economy, in line with various policy responses to push for economic recovery,” the central bank said in a statement.

The rise in forex reserves in July was driven by the government’s global bonds issuance and government loans, according to the central bank.

The government has raised 100 billion yen (US$930 million) from the issuance of five-tranche samurai bonds to help cover the fiscal deficit and fund the coronavirus pandemic response in early July.

The deal was finalized in Japan on Jul. 2 and sold in maturities of 20 years, worth 1.5 billion yen with a coupon rate of 1.8 percent; 10 years, worth 13.4 billion yen with a 1.59 percent coupon rate; and seven years, worth 10.1 billion yen with a 1.48 percent coupon rate.

The government previously planned to raise $5.5 billion from loans from multilateral organizations in the second half of the year, after raising $1.8 billion in the first half from five multilaterals, including the World Bank and the Asian Development Bank (ADB).

“We are focusing on getting loans from our multilateral partners in the second half of this year after focusing on raising funds from global bonds in the first half,” said Luky on Jul. 27.

The government faces the daunting task having to raise Rp 900.4 trillion from the issuance of sovereign debt papers in the second half of the year to cover its budget deficit of 6.34 percent of gross domestic product (GDP) and repay its debts, after raising Rp 630.5 trillion from the issuance of debt papers in the first half.

It has also unveiled a $40 billion bond sale program with the central bank as part of the “burden sharing” scheme aimed at easing the government’s debt burden.

“Although it has been declining, we see the risks from the ongoing COVID-19 pandemic remaining and thus still creating uncertainty in the global financial market,” said Bank Mandiri economist Andry Asmoro in a note.

There will be some delays in foreign direct investment inflows as the global value chain has been seriously disrupted, he went on to say, adding that imports had declined more than exports due to the halt in production and investment activities.

“Hence, it may shrink the current account deficit, supporting Indonesia’s balance of payment, foreign reserves and rupiah exchange rate in 2020,” Andry added.