Research institution Supply Chain Indonesia, which mainly focuses on logistics matters, requests the government to reevaluate its plan to use three ports in Banten (West Java) to take over some of the workload of Jakarta's Tanjung Priok port, Indonesia's largest seaport. Due to inefficiencies at Tanjung Priok, which handles about two-thirds of Indonesia's total international trade, dwelling time at this seaport is high and this gives rise to port congestion and high logistics costs. The government therefore wants three ports in Banten to support Tanjung Priok's trade activities.

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Indonesia's current account deficit is expected to rise to USD $26 billion, or 2.6 percent of the nation's gross domestic product (GDP), in 2016. This increase is expected because rising investment and infrastructure development in Indonesia will require more imports from abroad. In 2015 Indonesia's current account deficit was recorded at USD $17.8 billion (2.06 percent of GDP), improving from a USD $27.5 billion deficit (3.09 percent of GDP) in the preceding year (when Indonesia touched a record high current account deficit, and which seriously undermined investors' confidence in the nation's assets).

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Indonesia's trade surplus was better than expected in February 2016. Today, Indonesia's Statistics agency (BPS) announced that the nation's trade surplus was recorded at USD $1.14 billion in the second month of the year, considerably higher compared to the revised USD $10 million surplus Indonesia recorded in the preceding month. Suryamin, Chairman of BPS, said this surplus was the biggest February surplus in the last five years. Another positive sign is that - although continuing to decline in February - the contraction of Indonesia's exports in February occurred at the slowest rate since October 2014.

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By September 2016 the Indonesian government plans to have revised regulations regarding exports of mineral ore, part of Law No. 4/2009 on Mineral and Coal Mining (New Mining Law). Per January 2014 mineral ore exports from Indonesia should have been banned altogether as the government aims to boost domestic smelter development and reduce the country's dependence on raw material exports. However, a last-minute regulation, signed in January 2014, softened this ban and allowed exports of copper, manganese, zinc, lead, and iron ore concentrates until 2017. Now the government may decide for a two-year delay up to 2019.

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Indonesia's commodity-rich East Kalimantan is one of the worst affected Indonesian provinces in terms of global trade and weak commodity prices. East Kalimantan's export performance is heavily dependent on prices of oil, natural gas and coal. In 2015 the total value of East Kalimantan's exports plunged 30.4 percent year-on-year (y/y) to USD $18.3 billion from USD $26.35 billion in the preceding year. Since 2011 the province's exports have posted a consecutive annual decline in line with the declining trend of commodity prices.

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Statistics Indonesia (BPS) announced on Monday (15/02) that Indonesia's trade balance turned back into a (small) surplus in January 2016. In the first month of the year, Indonesia posted a trade surplus of USD $50.6 million, beating analyst forecasts. In the preceding two months the country had to cope with a trade deficit. After the news, Indonesia's currency appreciated markedly against the US dollar. However, on a year-on-year (y/y) basis Indonesia's exports and imports are still significantly down and there remains much cause for concern.

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The central bank of Indonesia (Bank Indonesia) announced on Friday (12/02) that Indonesia's current account deficit widened to 2.39 percent of the country's gross domestic product (GDP), or USD $5.1 billion, in the fourth quarter of 2015 from a deficit of 1.94 percent of GDP (USD $4.2 billion) in the preceding quarter. This increase was due to a decline in the non-oil & gas trade balance surplus as non-oil & gas imports grew 7.5 percent (q/q) amid higher domestic demand amid accelerating economic growth in the last quarter of 2015.

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The Indonesian rupiah has been under pressure so far today (03/02) on concern that falling oil prices drag down other commodity prices, hence negatively affecting Indonesia's export performance. Yesterday, a global selloff in stocks occurred as oil prices were again touching the USD $30 per barrel mark. Emerging market currencies too are under pressure. The Indonesian rupiah had depreciated 0.79 percent to IDR 13,799 per US dollar (Bloomberg Dollar Index) by 12:55 pm local Jakarta time.

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Indonesia posted a trade deficit of USD $230 million in December 2015 as imports (USD $12.12 billion) exceeded exports (USD $11.89 billion), the second monthly trade deficit in 2015. Overall, the country's trade balance shows a surplus of USD $7.51 billion in 2015, significantly improving from the USD $2.2 billion trade deficit in the preceding year. But despite posting a good trade surplus in full-year 2015, a closer look at the data still reveals weak global and domestic conditions.

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Although not final yet, the United States plans to impose anti-dumping duties on imports of uncoated paper sheets from Indonesia. On Monday (11/01) the US Commerce Department said it plans to introduce anti-import duties in the range of 2.05 percent to 222.46 percent for uncoated paper sheet imports from Indonesia, Australia, China, Portugal and Brazil. On 22 February 2016 the final decision is expected to be announced by the US Commerce Department.

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Earlier this week, the central banks of Indonesia (Bank Indonesia), Malaysia (Bank Negara Malaysia), Thailand (Bank of Thailand) jointly announced the launch of the local currency settlement framework. This framework aims at boosting the use of local currencies in transactions (specifically related to trade and investment) conducted between Indonesia, Malaysia and Thailand in an effort to reduce these countries' dependence on the US dollar.

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The trade surplus of Indonesia widened in September 2017 as export growth outpaced import growth. Indonesia's Statistics Agency (BPS) announced on Monday (16/10) that the nation's trade balance showed a USD $1.76 billion surplus in September, higher than analysts' forecasts and slightly higher than the USD $1.72 billion surplus in the preceding month.

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The Indonesian government is currently studying the opportunities and challenges with regard to the making of a new bilateral trade deal with the USA. These efforts are a side-effect of US Vice President Mike Pence's recent visit to Indonesia when he signed 11 trade and investment deals worth a combined USD $10 billion.

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Ahead of the Islamic Ramadan and Idul Fitri celebrations, consumption tends to increase in Indonesia. One of the products that is searched for by Indonesian consumers (those who adhere to Islam) is Muslim fashion such as clothes and the veil. In fact, the Indonesian government wants the nation to become Asia's center for Muslim fashion by the year 2018 and the world's Muslim fashion leader by 2020. Muslim clothes are also envisaged to become a key export product. Currently, Indonesia's Muslim fashion exports are still rather insignificant.

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Indonesia's balance of payments registered a deficit in the first quarter of 2016. Based on the latest data from Indonesia's central bank (Bank Indonesia), the deficit stood at USD $287 million in Q1-2016, down from a USD $1.3 billion surplus in the same quarter last year. The balance of payments deficit was the result of the nation's Q1-2016 capital and financial transaction surpluses (USD $4.17 billion) not being able to cover the current account deficit (CAD). Indonesia's Q1-2016 CAD shrank to USD $4.67 billion, or 2.14 percent of the nation's gross domestic product (GDP).

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Although Indonesia's economic growth in the first quarter of 2016 was below analysts' estimates, most analysts agree that the nation's economic growth in the second quarter of the year could reach 5 percent (y/y), supported by domestic consumption and capital inflows. In Q1-2016 Indonesia's economic growth climbed at a pace of 4.92 percent (y/y) - accelerating from the 4.73 percent (y/y) GDP growth pace in the same quarter one year earlier - but significantly below estimates of most analysts. For example, Bank Indonesia expected GDP growth around 5.1 - 5.2 percent (y/y).

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The Centre for Strategic and International Studies (CSIS) believes that the economy of Indonesia will benefit if the government decides to participate in the Trans-Pacific Partnership (TPP) because this free trade deal would make the Indonesian economy more efficient and makes Indonesian exports more competitive. However, Philip Vermonte, Executive Director of CSIS, said a comprehensive study on the matter is yet to be carried out. Others remain concerned about a possible huge rise in imports into Indonesia if Southeast Asia's largest economy would join the TPP deal.

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The government of Indonesia is yet to find a middle way between encouraging the development of processing facilities for the country's mining output and the relaxation of mineral ore exports. Based on Law No. 4/2009 on Mineral and Coal Mining (New Mining Law), exports of mineral ore should have been fully banned in 2014. However, due to the lack of domestic smelting capacity a last-minute regulation was signed in early January 2014 by former Indonesian President Susilo Bambang Yudhoyono that softened this ban.

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Indonesia is eager to enhance trade relations with Europe through the establishment of the Indonesia-European Union (EU) Comprehensive Economic Partnership Agreement (CEPA). Thomas Lembong, Indonesia's Trade Minister, said joining this free trade deal will modernize and improve Indonesia's existing trade regulations. Joining the Indonesia-EU CEPA is the current top priority of the Indonesian government in terms of free trade deals. It aims to have reached an agreement with the EU by late-2017. Afterwards, Indonesia will seek to join the Trans-Pacific Partnership (TPP) and it also showed interest to join the European Free Trade Association (EFTA).

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Broad market trends in the Indonesian rupiah have held relatively consistent over the last year, with a modest devaluation seen against the US dollar. We did see fluctuations in these trends during the summer months but many of these moves came as a result of external influences. One of the best examples here is the media turmoil that posted during this period with respect to a slowdown in the Chinese economy, and this has left many investors wondering whether the rupiah will be able to stand on its own merits and reverse some of its earlier weakness.

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