2012.05.31 13:06:00 Bank Indonesia Deputy Gov Sees 2Q Balance Of Payments Swinging To Surplus

JAKARTA -(Dow Jones)- Bank Indonesia Deputy Governor Halim Alamsyah said Thursday that Indonesia's balance of payments would likely return to a surplus of $2 billion in the second quarter of 2012 after posting a deficit of $1 billion in the first quarter. Alamsyah, speaking during an investment presentation, said the current account deficit could narrow to $2.4 billion from $2.9 billion in the first quarter, while the financial account surplus could rise to $4.4 billion from $2.2 billion. Alamsyah also said inflation in May would likely be steady after it reached 4.50% in April and 3.97% in March, adding that "inflation under the current situation really is benign." The median forecast in a Dow Jones Newswires poll of 12 regional economists was for inflation to come in at 4.60% in May. Official figures are due Friday. Worries over the country's current account deficit have added pressure on the rupiah, which has fallen around 3% this month as risk-averse foreign investors cut their holdings of rupiah assets amid worries about the crisis in the euro zone. Official figures on the balance of payments will likely be released in August. Alamsyah also reiterated that the central bank had no plans to institute capital controls, a concern raised recently as the spread between Bank Indonesia's spot rate for the U.S. dollar-rupiah pair and rates elsewhere in the market widened last week. He also reiterated that BI would continue to "heavily intervene" in the currency market. "We are trying to give confidence to the market that BI is always willing to fill the gaps when the need arises," he said. The central bank is suspected of selling hundreds of millions of dollars each day this week to arrest the slide in the rupiah, which is likely to amount to its largest intervention efforts this year. -By Ben Otto, Dow Jones Newswires; +62 21 3983 1277; ben.otto@dowjones.com (END) Dow Jones Newswires May 31, 2012 07:06 ET (11:06 GMT)