Indonesia’s balance of payments (BoP) is expected to continue gaining strength in the fourth quarter (Q4) of 2019, thereby bolstering external resilience. The main contributors to the BOP gain were an influx of foreign capital inflows and a manageable current account deficit.

The net foreign inflow of portfolio investment to domestic financial markets in Q4 of 2019 stood at US$6.36 billion, up from US$4.88 billion in Q3 of 2019. Meanwhile, Bank Indonesia (B.I.) expects a manageable current account deficit in line with the sharp decrease in the trade deficit to USD0.03 billion from USD1.39 billion the month earlier. Consequently, the current account deficit in 2019 is projected at 2.7% of GDP and in the 2.5-3.0% of GDP range in 2020.

Furthermore, the position of reserve assets at the end of December 2019 increased to US$129.2 billion, equivalent to 7.6 months of imports or 7.3 months of imports and servicing government external debt, which is well above the international adequacy standard of three months.