Indonesia Records Trade Surplus

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Indonesia Records Trade Surplus

Indonesia Records Trade Surplus In August

Indonesia posted a higher-than-expected trade surplus in August, which is now sitting at 3-month highs. The jump in the trade surplus is due to strong experts, which have also improved during the same period.

This trade data will be a key indicator for the central bank which will be holding its policy meeting tomorrow. According to economists, the Bank Indonesia (BI) will not make any changes to its interest rate policy.

Exports Jump Higher In August

Some of Indonesia's top exports are palm oil, coil, and nickel metals. All of these commodities have earned the country a $2.89 billion surplus in August. This was also higher than the surplus of $1.96 billion from last month.

On a yearly basis, the month of August showed a 7.13% growth in exports, which is now sitting at $23.56 billion. The forecast was only for around a 3.83% increase, which means the actual reading was beyond everyone's expectations.

However, imports have also increased by 9.46% when compared with the last year and are now sitting at $20.67 billion.

Given the current economic conditions, the BI will likely wait and ensure stability before committing to rate cuts. Also, the BI is likely waiting for the Federal Reserve to make the first move.

However, the increasing surplus will allow the BI to have more confidence in the economy and will pave the way for future rate cuts.

At the same time, the BI is really serious about monetary and macroeconomic stability and will not change the interest rate until they are 100% sure. So, for the time being, the interest rate in Indonesia will remain at 6.25%.

The US central bank is only 2 days away from making the first rate cut in the last few years. Once the US central bank makes its move, other central banks around the world, such as the BI, will also follow suit.

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