FX News Round-Up: Indonesia’s FX Reserves, Thomson Reuters and FXCM Trading Metrics

Indonesia’s foreign exchange reserves surged $3 billion to $110.5 billion in the month through July 31, boosted by the government’s Euro bond issue as well as oil and gas exports, reported Bank Indonesia on Friday. This compares with the $107.6 billion recorded in June.

Besides the Euro bonds, foreign investor inflows also boosted the forex reserves last month, said Tirta Segara, the central bank’s executive director for communication. The July’s FX reserve balance is enough to cover 6.4 months of imports, or alternatively finance 6.2 months of foreign debt repayments and imports. This is meets the international threshold of three months.

The Bank Indonesia deputy governor Perry Warjiyo noted that forex reserves will increase over the next few months, specifically in the third quarter, after the government allowed mining firm Freeport Indonesia to recommence overseas shipments of copper concentrates.

“The mineral sector will make more contributions to the country’s exports, especially due to the fact that the government has allowed Freeport to resume its exports,” said Warjiyo.

Meanwhile, Thomson Reuters, which controls electronic FX trading platforms such as FXall, Thomson Reuters SEF and Matching, reported that average daily volumes declined to $344 billion in July from $388 billion in June.

Closer analysis reveals that June’s figures were the second highest since December 2012, and that July’s figures were the lowest this year so far, a very sharp decline.

Forex brokerage FXCM also reported that its Q2 revenues declined 30 percent from a year ago and 15 percent from the previous quarter resulting in a loss of $1.5 million. However, the company announced stronger July retail FX volumes of $263 billion, a growth of 4 percent from June. Institutional volumes rose to a record $262 billion from $226 billion in June.