Indonesia Trade Surplus Increase In June

(RTTNews) - Indonesia's trade surplus rose in June, as exports strongly increased, and much faster than imports, figures from Statistics Indonesia showed on Friday.

The trade surplus increased $5.09 billion in June from $1.33 billion in the same month last year. Economists had expected a $3.52 billion.

In May, the trade surplus was $2.90 billion.

Exports surged 40.68 percent year-on-year in June, following a 27.22 percent rise in May. Economists had forecast a rise of 30.26 percent.

Imports increased 21.98 percent yearly in June, after a 30.73 percent growth in the prior month. Economists had expected a 20.10 percent.

On a monthly basis, exports rose 21.30 percent in June and imports gained 12.87 percent.

ING economist Nicholas Mapa said hefty trade surpluses this year have helped insulate the Indonesian rupiah to some extent, allowing Bank Indonesia a little more breathing room to keep rates untouched in 2022.

Further, the resumption of palm oil exports should help deliver sizable trade surpluses in the near term, which could be supportive of IDR as well, the economist noted.

Despite this outlook, ING expects that BI will finally consider raising policy rates next week given recent developments on central bank policy.

"Monetary authorities in the region and around the world have been ratcheting up tightening efforts in response to expectations of aggressive rate hikes from the US Federal Reserve," Mapa said.

"As such, BI could consider this development and opt to carry out a modest 25bp rate hike next week to help defend IDR from potential financial outflows."