Indonesia: Merchandise exports drop in July
Merchandise exports dived 18.0% in annual terms in July, following June’s 21.2% dive. Meanwhile, merchandise imports decreased 8.3% over the same month last year in July (June: -18.3% yoy).
As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 1.3 billion surplus in July (June 2023: USD 3.5 billion surplus; July 2022: USD 4.1 billion surplus). Lastly, the trend pointed down, with the 12-month trailing merchandise trade balance recording a USD 46.6 billion surplus in July, compared to the USD 49.4 billion surplus in June.
On the implications of July’s reading, ING analyst Nicholas Mapa commented:
“The continued narrowing of the trade surplus for Indonesia points to a fading key support for the rupiah, which enjoyed a boost in 2022 when the trade surplus hit a record high of $7.5bn. This development could be telling for the IDR, which has been under pressure of late and down roughly 1.5% for the month of August. Indonesia recently asked exporters to retain a portion of export receipts onshore to help improve dollar liquidity, a potential counter to the narrowing trade surplus.”