BI Records Indonesian Transactions Running Down To 900 Million US Dollars In The Third Quarter Of 2023

JAKARTA - Bank Indonesia (BI) reported that 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).

Head of the Communication Department of Bank Indonesia Erwin Haryono said that the current account deficit had fallen considerably compared to the second quarter of 2023 which recorded a deficit of US$2.2 billion or equivalent to 0.6 percent of GDP.

"The balance of transactions is improving, supported by the improvement in the performance of the trade balance of goods and services which remains solid," Erwin wrote in his official statement, Tuesday, November 21.

Erwin explained that the surplus in the non-oil and gas trade balance was increased, supported by improvements in demand for several export commodities, especially iron and steel, amid the trend in commodity prices that were still falling.

Meanwhile, the oil and gas trade balance deficit is increasing in line with the increase in world oil prices.

The improvement in the current balance of transactions was also supported by a decrease in the service deficit, which was supported by an increase in foreign tourist visits in line with the ongoing recovery of the tourism sector.

In addition, the primary revenue balance deficit has also decreased in line with the payment of yields to lower foreign investors.

Furthermore, Erwin said that the performance of capital and financial transactions has also improved amidst the increasing uncertainty of global financial markets.

Capital and financial transactions in the third quarter of 2023 recorded a deficit of 300 million US dollars or equivalent to 0.1 percent of GDP.

This figure is much lower than the deficit of US$4.8 billion or equivalent to 1.4 percent of GDP in the previous quarter.

The low deficit in capital and financial transactions is supported by the continued direct investment as a reflection of the maintained positive perception of investors towards domestic economic prospects.

Other investments also noted that the surplus was influenced by the withdrawal of foreign debt to finance corporate business activities.

Meanwhile, portfolio investment noted an increase in deficits in line with capital flows out of the stock market and bonds as a result of the increasing uncertainty in global financial markets amid foreign capital flows entering the Bank Indonesia Securities (SRBI).

The Indonesia Payment Balance (NPI) in the third quarter of 2023 showed significant improvements by recording 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.

Erwin said that this condition was supported by the current account balance deficit and improved capital and financial transactions.

With these developments, the position of foreign exchange reserves at the end of September was recorded to remain high at 134.9 billion US dollars, or equivalent to financing 6.0 months of imports and payment of government foreign debt, and was above the international adequacy standard of about 3 months of imports.