BI Boss Calls Indonesia's Foreign Exchange Reserves Above The International Average

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) noted that foreign capital flows returned to the country towards the end of this year in line with the easing of global uncertainty and the improving economy of India and the United States (US).

BI Governor Perry Warjiyo said that foreign capital flows were included in the form of investment in the domestic financial market portfolio, where net inflow in the fourth to 19th quarter of December 2023 was recorded at 5.1 billion US dollars.

From BI data, the position of Indonesia's foreign exchange reserves at the end of November 2023 was recorded to have increased to 138.1 billion US dollars or equivalent to financing 6.3 months of imports or 6.1 months of imports and payment of government foreign debt.

"The number of foreign exchange reserves is far above the International adequacy standard of about 3 months of imports," Perry said at a press conference, Thursday, December 21.

In line with the incoming capital flow, the Indonesia Payment Balance (NPI) 2023 as a whole is estimated to remain healthy with transactions running a surplus of 0.4 percent to a deficit of 0.4 percent of GDP.

Perry conveyed that Indonesia's positive balance of payments is expected to continue in 2024, supported by the continuing flow of foreign capital in line with the increasing domestic economic prospects and the low current account deficit in the range of 0.1 percent to a deficit of 0.9 percent of GDP.

In addition, the trade balance surplus continued in November 2023 amounting to USD 2.4 billion supported by exports of Indonesia's main commodities, such as coal, iron and steel, as well as vegetable oil and fat.

On the other hand, with foreign capital flows returning, the rupiah exchange rate rose again. "The December 2023 exchange rate strengthened on average, 044 percent compared to developments in November 2023," he said.