Bank Indonesia Records Indonesia's Payment Balance Surplus In The Third Quarter Of 2024

Illustration (Photo: Doc Antara)

JAKARTA - Bank Indonesia (BI) recorded that the Indonesian Payment Balance (NPI) liner in the third quarter of 2024 improved so as to support external resilience.

NPI in the third quarter of 2024 recorded a surplus of 5.9 billion US dollars, from the previous deficit of 0.6 billion US dollars in the second quarter of 2024.

Executive Director of the Communications Department, Ramdan Denny Prakoso, said that the NPI surplus was supported by an increasing balance sheet balance of capital and financial transactions and a lower current account deficit.

"With these developments, the position of foreign exchange reserves increased from USD 140.2 billion at the end of June 2024 to USD 149.9 billion at the end of September 2024," he explained in his statement, Friday, November 22.

Denny conveyed that this was equivalent to financing 6.4 months of imports and paying the government's foreign debt, and being above the international adequacy standard of around 3 months of imports.

In addition, the current account balance recorded a decrease in the deficit.

In the third quarter of 2024, the current account balance recorded a deficit of US$2.2 billion or 0.6 percent of GDP, lower than the deficit of US$3.2 billion or 0.9 percent of GDP in the second quarter of 2024.

Denny said that the performance of the transaction balance was supported by the continued trade balance surplus of non-oil and gas goods, supported by non-oil and gas export growth in line with the increase in commodity prices, in the midst of higher-growing imports in line with the increasing domestic economic activity.

According to him, the balance sheet deficit was narrowed, driven by the increasing surplus of travel services in line with the increasing number of foreign tourist visits.

"The primary revenue balance deficit has also decreased, influenced by lower payments on investment returns to non-resident investors," he explained.

In addition, Denny said, the increase in the balance sheet surplus of secondary revenue driven by remittance receipts also supports the performance of the current account balance.

Denny added that the balance balance of capital and financial transactions continues. Where the balance of capital and financial transactions recorded a surplus of 6.6 billion US dollars in the third quarter of 2024, an increase compared to a surplus of 3.0 billion US dollars in the second quarter of 2024.

"Investment immediately posted an increase in surpluses, mainly from capital participation in the Industry for Processing, Health Services, as well as Transportation, Warehousing, and Communication sectors, in line with investor positive perceptions of the national economic prospects that are maintained," he said.

Denny said the flow of foreign capital into various portfolio investment instruments also increased along with the return on investment returns that remained attractive.

On the other hand, Denny said other investments noted that the increase in deficits was driven by the increasing placement of private investments in various foreign financial instruments.

In the future, Denny said that Bank Indonesia will always pay close attention to the dynamics of the global economy that can affect the prospects for NPI and continue to strengthen the response of policy mixes supported by close policy synergies with the Government and relevant authorities to strengthen the resilience of the external sector.

"NPI 2024 is predicted to remain good with the current account deficit maintained in the low range of 0.1 percent to 0.9 percent of GDP," he said.

Denny said that the balance of capital and financial transactions is predicted to continue to record a surplus supported by increased direct investment and portfolio investment in line with investor positive perceptions of the national economic outlook and attractive investment returns.