Indonesia's Payment Balance Deficit Of 1.5 Billion US Dollars In Third Quarter, BI Will Maintain Interest Rates At 6 Percent

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) recorded the Indonesia Payment Balance (NPI) in the third quarter of 2023 still recorded a deficit of 1.5 billion US dollars, this figure is lower than the deficit in the previous quarter of 7.4 billion US dollars.

In addition, Indonesia's current account balance in the third quarter of 2023 recorded a deficit of 900 million US dollars or equivalent to 0.2 percent of Gross Domestic Product (GDP).

The account deficit went down considerably when compared to the second quarter of 2023 which recorded a deficit of US$2.2 billion or equivalent to 0.6 percent of GDP.

Meanwhile, the deficit in capital and financial transactions was recorded at US $ 0.3 billion or equivalent to 0.1 percent of GDP.

Much lower than the deficit of US$4.8 billion or equivalent to 1.4 percent of GDP in the previous quarter.

Head of Bank Permata economist Josua Pardede said, taking into account the cut in the current account deficit in the third quarter of 2023 and the decline in the deficit in the balance of financial transactions, estimated that BI would maintain interest rates at the level of 6.00 percent at the next BI RDG.

"A lower deficit has the potential to provide indications of rupiah exchange rate volatility which tends to decline. In addition, because foreign inflows after US economic indicators improve, rupiah tends to be appreciated in the last 2 weeks," he told VOI, Wednesday, November 22.

Josua menyampaikan, transaksi berjalan pada kuartal IV-2023 diperkirakan akan melebibar karena defisit neracitas perdagangan jasa yang lebih tinggi memasuki musim liburan di Indonesia.

In addition, he estimates, the balance sheet will improve after portfolio investment posted a surplus, due to inflows in the stock market and domestic bonds.

On the other hand, direct investment is likely to decline further as investors maintain a wait and see approach before the election.

The CA deficit in full years 2023 is estimated at -0.28 percent of GDP, compared to the 0.96 percent surplus of GDP in 2022.

Overall, foreign exchange reserves are expected to range from US$133 to US$137 billion, and the rupiah is expected to close in the range of Rp15,300-Rp15,500 per US dollar by the end of 2023.