Breaking News, World News and Taiwan News.

Unexpected Indonesia trade surplus boosts rupiah

JAKARTA -- Indonesia posted a small and unexpected trade surplus in October after the central bank tightened monetary policy to slow the economy and imports, a policy likely to remain in place to stem the risk of outflows once U.S. tapering kicks in.

The trade surplus was US$50 million in October, data from the statistics bureau showed on Monday, compared with an expected deficit of US$650 million in a Reuters poll of economists.

News of the small surplus helped strengthen the rupiah, which has fallen more than 19 percent against the dollar this year over worries about a widening current-account deficit.

Export growth was 2.59 percent year-on-year in October, helping to push the trade balance into surplus — the first since August, which itself came after five consecutive deficits. Exports fell a revised 7.55 percent in September.

Inflation quickened slightly in November, partly due to pass-through costs from a depreciation in exchange rates, but was below Bank Indonesia's target of 9-9.8 percent this year.

Annual inflation picked up to 8.37 percent in October and was up 0.12 percent on a monthly basis. Core inflation, which excludes administered prices and volatile foods, picked up to 4.80 percent from 4.73 percent the previous month.

“It seems like there is a slightly more positive momentum in export growth going into 2014,” DBS economist in Singapore, Gundy Cahyadi, wrote.

“On the other hand, imports had been rather weak in August and September and we had expected a sequential rebound in October. This data showed that this didn't happen,” he said.

“It remains to be seen if this will continue in the coming months -- probably as investment growth continues to moderate, taking the brunt from the turn in sentiment and the still weak confidence in the rupiah.”

Inflation risks and a large current-account deficit, coupled with tight dollar liquidity, had forced Bank Indonesia to change its currency policy to “stabilization” from “finding a new equilibrium.”

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   English Courses  |   Terms of Use  |   Sitemap
  chinapost search