Jakarta. Indonesia posted a $1.13 billion trade surplus in March, the fourth consecutive surplus and the largest in 15 months, which analysts say will help ease pressure on the rupiah despite a weakening economy.

Exports by value last month totaled $13.71 billion, down 9.8 percent from the same month in 2014, data from the Central Statistics Agency (BPS) show.

Meanwhile, imports declined at a faster pace, falling 13 percent to $12.58 billion. Both exports and imports have declined in the past six months.

“Improving trade figures should provide some relief in the foreign exchange market, even though the impact may be limited as domestic dollar demand will still be high in the next few months,” said Dian Ayu Yustina, an analyst with Bank Danamon Indonesia, in a note to clients.

Indonesia posted a $2.43 billion trade surplus in the January-March quarter, up 129 percent from the same period the year before. In the first quarter, exports dropped 12 percent to $39.13 billion, while imports fell 15 percent to $36.70 billion.

“The biggest contributing factor is the large drop in fuel imports. For this quarter the oil-and-gas balance only reported a small deficit of $284 million, a big improvement from the previous quarter’s deficit of $3.5 billion,” Dian said.

Gundy Cahyadi, an economist at DBS Bank in Singapore, said the trade data “is likely to be a positive for market sentiment,” given lingering concerns of the current account balance.

Indonesia has suffered current account deficits ib the past three years as the values of exports on some key commodities like coal, crude palm oil and nickel decline in line with falling global commodity prices.

The deficit in the country’s current account — which is the broadest measure of trade and services — narrowed to 2.95 percent of gross domestic product last year, or equivalent to $26.2 billion, but that narrowed from 3.18 percent of GDP, or $29.1 billion, in 2013.

Bank Indonesia had forecast first-quarter current account deficit at around 1.8 percent to 2 percent of GDP, narrowing from 2.81 percent in the fourth quarter of 2014.

The bank forecasts it will reach around 3 percent of GDP by the end of 2015.

However, Gundy said it is also important to understand that the trade surplus comes alongside poor export growth.

“The only reason the trade balance records a surplus is that imports are trending much worse than exports. And imports of capital goods have continued to fall. This is arguably a net negative for the economy,” said Gundy.

Falling imports of capital goods means factories in Indonesia are producing less, as it is facing lower demand from domestic and global markets. The economy last year grew 5 percent, which was the slowest pace since 2009.

The rupiah was little changed on Wednesday with data from the central bank showing it at 12,976 per dollar, compared to 12,979 the previous day.

GlobeAsia

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Source: The Jakarta Globe