The BOP surplus stood at USD2.1 billion in the the third quarter of 2020, continuing from the surplus of USD9.2 million recorded in the previous quarter.
"Such development was supported by the current account and the capital and financial account surpluses," said Bank Indonesia (BI) Communication Department Head Onny Widjanarko in a press release on Friday.
Current account in the third quarter of 2020 charted surplus, supported by an increase in the goods trade balance surplus.
Last quarter, the current account surplus stood at USD1.0 billion (0.4% of GDP), after recording a deficit of USD2.9 billion (1.2% of GDP) in the previous quarter.
The gains were supported by a surplus in the goods trade balance in line with the improvement in export performance amidst subdued imports due to weak domestic demand.
Conversely, the service account deficit expanded influenced by an increase in the deficit travel service due to the lack of inbound travellers visiting Indonesia, as well as an increase in the deficit of other services such as telecommunications, computer, and information services in line with the rise of services imports to support online activities which have been increased during the covid-19 pandemic.
Meanwhile, the primary income account deficit widened, mainly driven by increasing yield payments on direct investment.
The capital and financial account recorded a surplus in the third quarter, despite rebalancing capital flows due to elevated global financial markets uncertainty.
The capital and financial account continued to record a surplus of USD1,0 billion (0.4% GDP) after experiencing a USD10.6 billion surplus (4.3% GDP) in the previous quarter.
This surplus stemmed from inflows of direct investment and other investment, despite experiencing a rebalancing of portfolio investment due to heightened global financial markets uncertainty.
Direct investment inflows were maintained in line with the domestic economic recovery. Other investment transactions experienced a surplus driven by withdrawal of loan commitment to support the financing of covid-19 handling and the National Economic Recovery (PEN) program, as well as the withdrawal of private sector deposits abroad in line with the need for foreign loan payments.
Meanwhile, portfolio investment recorded net outflows totalling USD 1.9 billion, after recording net inflows of USD 9.8 billion in the preceding quarter.
"Owing to steps taken for stabilization and the strengthening of the BI policy mix, along with close coordination with the Government and Financial Services Authority (OJK), foreign capital inflow to the domestic financial markets was maintained," he stated.
"Looking forward, Bank Indonesia will carefully observe global economic dynamics that can affect Indonesia’s BOP outlook, continually strengthen the policy mix to maintain economic stability, and enhance policy coordination with the Government and relevant authorities to bolster the external sector resilience," he concluded.