Jakarta - Bank Indonesia (the central bank/BI) has predicted the country`s balance of payment will record a significant surplus in the fourth quarter of 2011 after it suffered a deficit in the previous quarter.

    The third-quarter deficit in the country`s balance of payment was very much caused by the negative impact of the European sovereign debt crisis which prompted some of foreign investors to release domestic shares and state debt securities, Bank Indonesia Governor Darmin Nasution said here on Thursday.

    Meanwhile, positive sentiment to the prospects of the Indonesian economy and interesting yield on investment in the country were expected to boost foreign capital inflows to Indonesia in the fourth quarter of 2011 which would in turn improve capital and financial transactions` performance, he said.

    In addition, the amount of government spending and foreign loans withdrawn in the fourth quarter of 2011 was expected to increase, he said.

    "For the whole 2011, the country`s balance of payment is expected to record a significant surplus. Meanwhile, our foreign exchange reserves at the end of October 2011 stood at US$114 billion, an equivalent to 6.6 months of imports and government foreign debt repayments," he said.

    Commenting on the rupiah which came under pressure in recent months, he said the local unit weakened an average of 1.36 percent to Rp8,865 per dollar in October 2011.

    The risk related to the prospects of the European and US economies had prompted investors to adjust their investment instrument to the current conditions, thereby putting a strain on the rupiah`s exchange rate, he said.
 -Antara, 11 November 2011-

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