Updated April 22nd, 2024 at 16:30 IST

Indonesia posts larger-than-expected trade surplus in March as imports shrink

The surplus was also larger than February's surplus of around $870 million, which was the smallest in nine months.

Reported by: Business Desk
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Indonesia's trade surplus: Indonesia's trade performance for March has defied expectations, with the country posting a surplus, amounting to $4.47 billion, outpacing the forecasted surplus of $1.13 billion from a Reuters poll, largely due to a notable reduction in imports, according to data released by the statistics bureau on Monday.

This surplus figure marks an increase compared to February's surplus of around $870 million, which had been the smallest in nine months.

Exports & imports fall

March saw a 4.19 per cent decline in exports year-on-year (YoY) , totalling $22.43 billion, while imports dropped by 12.76 per cent to $17.96 billion. Projections from the Reuters poll had anticipated a 9.03 per cent decrease in exports and a 1.57 per cent decline in imports for the same period.

The decrease in imports was primarily driven by smaller purchases of machinery and electronic products. Conversely, the decline in exports was largely attributed to the reduced value of mining commodity shipments, as highlighted by Amalia Adininggar Widyasanti, the chief of Statistic Indonesia.

Despite the positive trade figures, economist Fakhrul Fulvian from Trimegah Securities expects the central bank to adopt a hawkish stance during its upcoming policy meeting this week. 

Rupiah's struggles amid global pressures

This move aims to support the vulnerable rupiah (IDR), which has been under pressure due to a strong US dollar and escalating tensions in the Middle East. While the rupiah experienced a modest 0.12 per cent increase on Monday, it continues to hover near its weakest level since 2020.

According to a Reuters poll, 29 out of 35 analysts anticipate that the central bank will maintain its benchmark interest rate during the April 23-24 meeting, while six analysts expect a 25 basis point hike.

Furthermore, the same survey indicates a shift in expectations for Indonesia's interest rate cuts to the next quarter, in contrast to previous projections for a cut in the second quarter as indicated in a March poll. Analysts now foresee a reduction to 5.50 per cent by the end of December, compared to the previously anticipated 5.25 per cent.

(With Reuters Inputs)

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Published April 22nd, 2024 at 16:30 IST