Indonesia Buys Emerging-Nation Debt to Diversify Reserves
August 19, 2011, 7:34 AM EDTBy Novrida Manurung
(Updates with comment from central bank governor in second paragraph.)
Aug. 19 (Bloomberg) -- Indonesia’s central bank bought the debt of “emerging nations” to diversify its foreign-exchange reserves, halting gold purchases as the yellow metal surged 32 percent this year to a record, Governor Darmin Nasution said.
“Lately, we haven’t bought gold as the price is expensive and it isn’t liquid,” he said in Jakarta today. “We prefer to buy emerging countries debt.”
The nation’s reserves rose to a record $123.2 billion in early August, according to President Susilo Bambang Yudhoyono. Bank Indonesia has been diversifying its reserves for more than a year now and the composition between U.S. dollar and other currencies is now almost balanced, Nasution said.
A gauge that tracks the greenback against the currencies of six major U.S. trading partners slid 0.4 percent after Standard & Poor’s cut the debt rating of the world’s largest economy for the first time on Aug. 5.
Gold touched an all-time high of $1,868.63 an ounce today, poised for a seventh weekly gain, as a dimming global economic outlook spurred demand for assets perceived to be safe.
--With assistance from Berni Moestafa in Jakarta. Editors: Anil Varma, Arijit Ghosh
To contact the reporter on this story: Novrida Manurung in Jakarta at nmanurung@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
