Bank Indonesia: Balance of payments must be strengthened to mitigate Middle East conflict impact

Jakarta — Bank Indonesia Governor Perry Warjiyo has stated that Indonesia’s balance of payments must be strengthened to mitigate the impact of the Middle East conflict.

“The trade balance in January 2026 recorded a surplus of just over $1 billion, significantly lower than the $2.5 billion surplus in December 2025, due to the slowdown in global demand for non-oil exports,” he said during a press conference on the results of Bank Indonesia’s Board of Governors meeting held online in Jakarta on Tuesday.

Capital and financial flows in January-February 2025 recorded a cumulative net inflow of $1.6 billion, supported by inflows of foreign capital into Bank Indonesia Rupiah Securities (SRBI).

In March 2026, portfolio investment recorded a net outflow of $1.1 billion, triggered by increased uncertainty in global financial markets due to the Middle East conflict.

Regarding foreign exchange reserves (cadev) as of the end of February 2026, the position stood at $151.9 billion, equivalent to 6.1 months of imports or 5.9 months of imports and government foreign debt repayment, and remains above the international adequacy standard of approximately three months of imports.

“Going forward, the declining outlook for global economic growth and rising global oil prices require attention as they could widen the current account deficit towards the upper limit of the deficit range of 0.9 to 0.1 per cent of GDP (Gross Domestic Product),” said Perry.

“In this regard, policy synergy to improve balance of payments performance and external resilience, including building global investor confidence, needs to be continuously strengthened,” said the Bank Indonesia Governor.