JAKARTA. Bank Indonesia estimates that Indonesia's Balance of Payments (NPI) for Q1 2019 will be surplus, so that it supports the efforts to strengthen external stability.
The outlook for the balance of payments is affected by the estimated current transaction deficit that becomes lower and substantial capital and financial account surplus. The prospect of improving the current account deficit is supported by an increase in the trade balance surplus, from US$ 0.33 billion in February 2019 to US$ 0.54 billion in March 2019.
The increase in surplus was influenced by the increase in the non-oil and gas trade balance and a decline in the oil and gas trade balance deficit. Meanwhile, the capital and financial account surplus were quite large, supported by foreign capital inflows which reached US$ 5.5 billion as of March 2019. With this development, the position of foreign exchange reserves at the end of March 2019 reached US$ 124.5 billion, Bank Indonesia wrote in a press release last week.
The position of foreign exchange reserves is equivalent to 7.0 months of imports or 6.8 months of imports and government foreign debt payments, and is above the international adequacy standard of around 3 months of imports.
Going forward, policy synergy will continue to be focused on efforts to strengthen external resilience. Steps to strengthen exports, including improving the performance of the tourism sector, and controlling imports will continue to be pursued so that the current account deficit 2019 can reach the range of 2.5% of GDP. (AM)