JAKARTA (TheInsiderStories) – The Indonesian foreign exchange (forex) reserves reached of US$123.3 billion at the end of February 2019, slightly up from January at $120.1 billion, said Bank Indonesia (BI) today (03/08). This position is equivalent to financing 6.9 months of imports or 6.7 months of imports and payment of government foreign debt.
Central Bank’ spokesman Junanto Herdiawan, said that this figure is above the international adequacy standard of around 3 months of imports. The forex reserves, he added, could support the resilience of the external sector and maintain macroeconomic and financial system stability.
He continued, the rising of forex reserves in February 2019 was mainly influenced by the issuance of global SUKUK, oil and gas foreign exchange revenues, and other foreign exchange receipts.
Going forward, BI considers forex reserves to be adequate, supported by confidence in the stability and prospects of a good domestic economy, and export performance that remains positive.
Meanwhile, Indonesia recorded a worsening current account deficit (CAD) situation, as it swelled to $9.1 billion in the fourth quarter (Q4) of 2018, according to BI. The figure is equal to 3.57 percent of the Gross Domestic Product (GDP).
“The swelling CAD is affected by the degrading performance of non-oil and gas goods, due to high imports in accordance with strong domestic demands amid limited exports situationn,” said Agusman in a written statement released today (03/07).
During the whole year of 2018, Indonesia continues recording current account deficit at $31.1 billion, or 2.98 percent of GDP.
Agusman mentioned that the deficit was affected by several conditions such as high non-oil and gas import, oil import increase, and financial global turmoil. By this, 2018′ balance of payment (BoP) deficit is $7.1billion.
Meanwhile, in the Q4, Indonesia recorded $5.4 billion surplus of BoP, supported by capital and financial transaction surplus. This is the first surplus, as Indonesia has three quarters deficit. In the first quarter, the deficit was $3.9 billion. In the second quarter, it was $4.3 billion. And in the third quarter, the deficit was $4.4 billion .
But in the future, BI’s Governor Perry Warjiyo believes that this deficit will gradually decline by boosting exports, suppressing imports, B20 programs, tourism promotion programs and postponement of infrastructure projects.
The Bank also hopes that this year the global pressure on the national economy will not be as similar as last year. The existence of a trade war between China and the United States (US) has put pressure on the global economy.
He revealed, that this year BI estimated the Indonesian economy could grow in the range of 5.0-5.4 percent. This figure is more optimistic when compared to Indonesia’s economic growth projection in 2018 which is pegged at 5.1-5.2 percent.
“Investment also grows 6.5-6.9 percent, we have to grow bigger if we want to increase our GDP. In total, the disaggregation of economic growth from domestic demand is seen from the 5.5 percent investment growth,” said the governor.
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