Jakarta (Indonesia Window) – Indonesia’s central bank, Bank Indonesia (BI), has noted that the performance of the country's Balance of Payments (BOP) in the first quarter of 2022 remained good, thus supporting the external resilience.

In the first quarter of 2022, the current account surplus continued despite the capital and financial account deficit, making the BOP experience a deficit of 1.8 billion U.S. dollars, Head of BI’s Communications Department Erwin Haryono said in an official statement on Friday.

With such a condition, the position of foreign exchange reserves at the end of March 2022 was recorded at 139.1 billion dollars, equivalent to financing 7.0 months of imports and government foreign debt, and was above the international adequacy standard, Erwin explained.

According to him, the current account surplus continued in the first quarter of 2022, mainly supported by the surplus in the goods balance which remained high.

In the first quarter of 2022, the current account continued to have a surplus of 0.2 billion dollars (0.1 percent of the GDP), although it was lower than the surplus in the previous quarter of 1.5 billion dollars (0.5 percent of the GDP), he added.

He further said this positive performance was supported by the non-oil and non-gas trade balance surplus which remained strong in line with the still high prices of global export commodities, such as coal and CPO (crude palm oil), amid an increasing oil and gas trade balance deficit due to rising world oil prices.

He pointed out that the service account deficit increased in line with the continued improvement in economic activities and the increase in the number of national tourist visits abroad after the easing of policies on international travel restrictions and the reopening of the umrah (minor hajj) pilgrimage.

On the other hand, the primary income account deficit improved, thereby sustaining the current account surplus, he said, adding that the performance of the capital and financial account in the first quarter of 2022 was maintained, supported by an increase in the direct investment surplus, amid the high uncertainty in global financial markets, Erwin said.

The capital and financial account in the first quarter of 2022 recorded a deficit of 1.7 billion dollars (0.5 percent of the GDP), improving compared to a deficit of 2.2 billion dollars (0.7 percent of the GDP) in the fourth quarter of 2021.

Bank Indonesia will continue to monitor the dynamics of the global economy that may affect the outlook for the balance of payments and continue to strengthen the policy mix to maintain economic stability, as well as continue policy coordination with the government and relevant authorities to strengthen the external sector resilience, he said.

Reporting by Indonesia Window