JAKARTA - Bank Indonesia (BI) estimates that Indonesia's Balance of Payments (BOP) in the first quarter of 2020 will continue to improve despite a decrease in foreign capital amid the coronavirus disease (Covid-19) disease.
According to BI Governor Perry Warjiyo, the BOP is supported by the potential for a decrease in the current account deficit (CAD) in line with the improved trade balance, which recorded a surplus of US$2.34 billion in February 2020.
"The flow of portfolio investment that entered [Indonesia] until January 2020 experienced a capital reversal triggered by increasing global uncertainty due to the Covid-19 outbreak," Mr Warjiyo said in a press conference broadcast on BI's official YouTube channel on Thursday (19/3).
As of Tuesday (17/3), portfolio investment was recorded at US$365 million, down from US$5.1 billion in February. Meanwhile, foreign exchange reserves at the end of February remained high at US$130.4 billion, equivalent to the financing 7.7 months of imports or 7.4 months of imports and government externall debt payment, and above the international adequacy standard of three months of imports.
"Going forward, Bank Indonesia estimates the current account deficit in 2020 and 2021 to be in the range of 2.5%-3.0% of the GDP (Gross Domestic Product)," concluded Mr Warjiyo. (MS)