Indonesia posts trade surplus in October

The container terminal at Tanjong Priok Port in Jakarta, Indonesia. The country has booked US$6.92 billion (S$9.8 billion) of surplus in the first 10 months of this year.
The container terminal at Tanjong Priok Port in Jakarta, Indonesia. The country has booked US$6.92 billion (S$9.8 billion) of surplus in the first 10 months of this year.ST PHOTO: PAUL CHEONG

Country's imports and exports both register their best month since August 2014

JAKARTA • Indonesia's exports and imports both increased in October, after months of deterioration, from a year earlier.

The statistics bureau yesterday said Indonesia exported US$12.68 billion (S$17.9 billion) of products in October, up 4.6 per cent from a year ago, while the pace of growth was the strongest in the month since August 2014.

Imports were US$11.47 billion, up for the first time in 25 months, by 3.27 per cent, and also the strongest since August 2014.

"The highest amount of imports was seen in machinery and electrical tools that reached US$80.9 million," said Mr Suhariyanto, head of the statistics bureau.

The trade surplus was US$1.21 billion in October, a tad smaller than the US$1.27 billion of September.

With the latest surplus record, Mr Suhariyanto said, the nation has booked US$6.92 billion of surplus in the first 10 months of this year.

  • SURPLUS

  • US$12.68b

    Indonesia's exports in October.

  • US$11.47b

    Imports for the same month.

The healthy trade surplus is expected to help Indonesia hold its current account deficit at a sustainable level, supporting the national currency from a possible hike of the US Federal Reserve's rate benchmark.

Low commodity prices have long hurt Indonesia's export earnings, in turn affecting everything from company profits and government revenue to people's purchasing power.

Investors were optimistic about Indonesia's growth given that the central bank has been easing monetary policy since January and that expectation has to be reversed, analysts have observed.

Bank Indonesia (BI) is widely expected to hold its main policy rate tomorrow at 4.75 per cent.

BI governor Agus Martowardojo last week said the central bank was still biased towards more easing, signalling more rate cuts in the future.

But analysts noted a plunge in the stock market, a weakening rupiah and rising government bond yields may prevent BI from more easing.

Meanwhile, BI has put a 20 per cent limit on foreign ownership in companies that offer electronic payment services in a bid to better regulate such services amid growing interest in financial technology.

The limit is for companies operating as card providers or offering switching, clearing or settlement services for electronic payments.

According to the new rules, signed last week, every company offering payment system services must also obtain a permit from BI.

The rules are meant to ensure that all companies maintain "the principles of prudence and adequate risk management" in accordance with national interests and consumer protection, BI said.

The new foreign ownership limit applies only to new investment or to any existing firm which is changing ownership.

REUTERS

A version of this article appeared in the print edition of The Straits Times on November 16, 2016, with the headline 'Indonesia posts trade surplus in October'. Print Edition | Subscribe