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Latest Reports Trade Balance
After two months of trade surpluses in February and March 2020, Indonesia’s trade balance swung back to a deficit in the following month. According to the latest data from Statistics Indonesia (BPS), Indonesia experienced a USD $344.7 million trade deficit in April 2020.
The trade balance of Indonesia showed a relatively small deficit in the last month of 2019. Based on the latest data from Statistics Indonesia (Badan Pusat Statistik, or BPS), a USD $28.2 million trade deficit was recorded in December 2019, much smaller than analysts had predicted.
Indonesia’s trade balance swung back into a surplus in October 2019. Statistics Indonesia (BPS), which released the country’s latest trade data on 15 November 2019, reported a USD $161 million trade surplus for Indonesia in October. It is an improvement from the USD $164 million trade deficit the country had experienced in the preceding month, and a huge improvement from the USD $1.76 billion trade deficit in the same month one year earlier (October 2018).
Indonesia’s trade balance swung back into a deficit in July 2019 as the country’s exports could not compensate for its imports. However, at USD $63 million, the monthly deficit is not too big (compared to the USD $2.3 billion and USD $1.1 billion deficits that were recorded in April and January, respectively).
In line with expectations, the central bank of Indonesia (Bank Indonesia) decided to leave its benchmark interest rate – the BI 7-Day Reverse Repo Rate – unchanged at 6.00 percent, while also maintaining its deposit facility and lending facility rates at 5.25 percent and 6.75 percent, respectively, at the two-day monthly monetary policy meeting that was held on 19 and 20 June 2019.
Emerging market assets in Asia remained under pressure on Thursday (16.05.2019), with risk appetite being particularly undermined by rising concerns over USA-China trade tensions.
Indonesia experienced its largest ever monthly trade deficit in April 2019. Based on the latest data from Statistics Indonesia (BPS), which were released on Wednesday (15.05.2019), Southeast Asia's largest economy recorded a USD $2.50 billion trade deficit.
It was a welcome surprise to see Indonesia recording a trade surplus of USD $540.2 million in March 2019, extending the monthly trade surplus to two (straight) months, which is something we had not seen in more than a year. However, when we take a look at the first quarter of 2019, then Indonesia’s overall trade balance still shows a deficit of USD $193.4 million.
Indonesia’s current account deficit widened to USD $31.1 billion, equivalent to 2.98 percent of the country’s gross domestic product (GDP), in full-year 2018. It is a big deterioration compared to the USD $17.29 billion deficit (1.7 percent of GDP) in the preceding year. It means the current account balance remains the Achilles’ heel of the Indonesian economy, one that – potentially - triggers rapid and large capital outflows in times of global economic turmoil.
Concern about Indonesia's Q4-2018 current account deficit as well as the value of the rupiah exchange rate should increase now the country posted a big USD $2.05 billion monthly trade deficit in November 2018. It is the highest monthly trade deficit for Southeast Asia's largest economy since July 2013.
Latest Columns Trade Balance
ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the June 2014 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the BI rate, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:
Inflation in June 2014 increased by 0.43 percent (month-to-month, mtm) in accordance with the traditional pattern ahead of the holy fasting month of Ramadan and Idul Fitri celebrations. These occasions always trigger inflationary pressures as consumers increase spending. However, June inflation remains under control and is even lower than the historical average in June in recent years (0.56 percent mtm). On a year-on-year (yoy) basis, inflation stood at 6.70 percent, thus continuing the downward trend since the beginning of 2014.
The Indonesian rupiah exchange rate is appreciating sharply on Monday (30/06). By 15:13pm local Jakarta time, the currency of Indonesia had strengthened 1.31 percent to IDR 11,838 against the US dollar. Main factors that cause this performance are the weakening US dollar (as a slowdown in the US economic recovery evokes expectations that the Fed Rate will not be raised soon) and falling oil prices; the US benchmark West Texas Intermediate declined 30 cents to USD $105.44 in mid-morning trade while Brent crude fell 22 cents to USD $113.08.
The Indonesian rupiah exchange rate depreciated 0.07 percent to IDR 12,099 per US dollar on Thursday (26/06) based on the Bloomberg Dollar Index, thus extending its recent weakening trend. This trend is expected to continue further as Bank Indonesia said it would allow rupiah depreciation in order to make the country’s exports more competitive (in an attempt to curb the current account deficit). However, this also dampens demand for Indonesian bonds. The 10-year yield rose to the highest level since February 2014.
The Indonesian rupiah exchange rate depreciated considerably on Wednesday (25/06) after Indonesia’s central bank (Bank Indonesia) said it would allow rupiah depreciation in an attempt to boost competitiveness of the country’s exports, while curbing imports. This strategy will have a positive impact on the country’s troubled trade balance. Based on the Bloomberg Dollar Index, the currency had weakened 0.67 percent to IDR 12,070 per US dollar by 14:30pm local Jakarta time.
The Indonesia rupiah exchange rate depreciated 0.16 percent to IDR 11,992 per US dollar on Monday (23/06) according to the Bloomberg Dollar Index, thus extending the currency’s recent depreciating trend. Meanwhile, Bank Indonesia's benchmark rupiah rate (known as the Jakarta Interbank Spot Dollar Rate, or, abbreviated JISDOR) depreciated 0.03 percent to IDR 11,971 against the greenback. What were the factors that influenced the rupiah’s performance today?
The benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) declined 0.34 percent to 4,847.70 points on Friday (20/06). Trade was thin on this week’s last trading day with only about 3.4 billion shares - valued at IDR 3.8 trillion (USD $319 million) - being traded on the Indonesia Stock Exchange (well below the average daily value of IDR 6.1 trillion). Foreign investors accounted for 48 percent of total trading, recording net buying worth of IDR 31.3 billion (USD $2.6 million).
After the Indonesian rupiah exchange rate temporarily surpassed the psychological boundary of IDR 12,000 per US dollar on Wednesday (18/06), concerns about the fundamentals of the currency emerged. The currency has been under pressure recently due to external factors (monetary policy of the Federal Reserve and geopolitical tensions in Iraq) and domestic factors (large private debt, significant US dollar demand, the wide trade deficit and political uncertainty ahead of the presidential election).
The Indonesian rupiah exchange rate depreciated 0.62 percent to IDR 11,893 per US dollar on Tuesday (17/06), a four-month low. The main reason behind this poor performance is increased concern about the impact of violence in northern Iraq - namely higher global oil prices - on Indonesia’s trade and budget deficits as Indonesia subsidises a significant amount of domestic fuels). As oil and gas imports accounted for about 23 percent of total imports of Indonesia in April 2014.
ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the May 2014 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the BI rate, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:
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