BI : FOREIGN EXCHANGE RESERVES TO REACH US$66 BILLION

Jakarta, Dec 2 (ANTARA) - Acting governor of Bank Indonesia Darmin Nasution said he believed the country's foreign exchange reserves could reach US$66 billion by the end of this year.

"We believe they could reach US$66 billion and so we would be able to finance 6.5 months of imports as well as repay debt installments and interests," he said after meeting with Vice President Boediono here on Wednesday.

He said last year the country's foreign exchange reserves were able to finance around 4.5 months of imports and if they could finance up to 6.5 months of imports this year it means there have been encouraging developments.

Darmin said until October the country's foreign exchange reserves had reached US$64.5 billion and at the end of November, although no official figures have been produced, they are believed able to surpass US$65 billion.

He admitted it was a good progress although he had never planned to raise them as high as possible. He admitted though that bigger reserves were better because "our security will be stronger against possible upheavals in the foreign exchange and currency markets."
Regarding the exchange rate Darmin said it was relatively stable despite a bit ups and downs.

He said the US dollar however tended to weaken or the rupiah to stabilize or even appreciate in a year ahead.

Darmin said the country's economic growth in the third quarter this year reached 4.2 percent. So, it seems the target of 4.3 percent growth for this year will be achieved, he said, adding that this year's inflation was predicted to be only three percent.

"This will be the lowest inflation rate so far," he said.

Regarding bank credits Darmin said their growth would not be as high as last year. It would not even be as high as has been targeted, he said. He said the target of credit growth for this year was 15 percent but its realization would likely be only close to 10 percent.
"However if we would see the situation in detail we will see that there are sectors that grow up 15 percent or lower namely agriculture, communications and electricity transportations," he said.

Manufacturing industries are facing slow growth. Credits for small and medium-scale industries grow 15 percent but the growth of credits for big businesses has been slow, he said.***2***