Indonesia's Balance Of Payments Remained Solid in Q4: BI

Jakarta: Indonesia's Balance of Payments (BOP) in the fourth quarter of 2020 (Q4/2020) remained solid, thereby reinforcing external resilience, Bank Indonesia (BI) said on Friday. 
 
The BOP recorded a low deficit at USD0.2 billion in the Q4/2020, supported by the persistence of current account surplus amidst a low capital and financial account deficit. 
 
Therefore, the BOP performance recorded a USD2.6 billion surplus in 2020. 

The official reserve assets at the end of December 2020 increased to USD135.9 billion, equivalent to 9.8 months of imports and servicing government external debt, which is well above the international adequacy standard.
 
"The current account remained surplus in Q4/2020, supported by a larger goods trade balance surplus." said BI Communication Department Head Erwin Haryono in a press release.
 
In Q4/2020, the current account recorded a surplus of USD0.8 billion (0.3% of GDP), continuing the surplus in the previous quarter of USD1.0 billion (0.4% of GDP). 
 
The current account surplus was bolstered by a surplus in the goods trade balance due to increased exports driven by the improvement in global demand and commodity prices, amidst limited increment of imports. 
 
Meanwhile, the services trade balance deficit widened mainly triggered by the increase in the deficit of telecommunications, computer, and information services, as well as the deficit of transportation services trade as a result of rising freight services payment as goods imports increased. 
 
In addition, the improvement in the domestic economy in Q4/2020 affected an increase of yield payments on direct investment, which drove a wider deficit of the primary income account.
 
According to the BI official, capital and financial account in Q4/2020 remained solid, primarily supported by the surplus of direct investment and portfolio investment. 
 
In Q4/2020, foreign capital inflows in direct investment and portfolio investment were stronger in line with reduced global financial market uncertainty, and positive investor perceptions towards the promising domestic economic outlook being maintained.
 
Direct investment posted a USD4.2 billion surplus, increasing from the previous quarter, mainly in equity capital instruments. 
 
In addition, portfolio investment also recorded net inflows of USD2.2 billion, thus reversing the USD1.9 billion net outflow in the previous quarter. 
 
Such development was primarily attributable to net capital inflows of the Rupiah government debt securities (SUN). 
 
In contrast, other investments recorded a sizable deficit in response to an increase in payments on maturing loans and placement of private sector deposits and other assets abroad. 
 
Consequently, the capital and financial account in Q4/2020 recorded a low deficit of USD 0.9 billion (-0.3% of GDP).
 
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