Indonesian exports grew 4.6 percent year-on-year (y/y) to USD $12.68 billion in October 2016, mainly supported by higher prices of coal, rubber and crude palm oil (CPO). Particularly the coal price has been experiencing a steep rise in the past couple of months. On a month-on-month (m/m) basis Indonesian exports grew 0.9 percent (y/y).

Meanwhile, Indonesian imports increased 3.3 percent (y/y) to USD $11.47 billion, or 1.6 percent (m/m) in October 2016. Suhariyanto, Head of BPS, informed that this increase was mainly driven by a 6.3 percent (y/y) increase in machinery and electrical appliance inward shipment.

Since 2015 Indonesia has been recording structural monthly trade surpluses, while in the period between late-2011 and end-2014 the country had to cope with structural trade deficits due to plunging commodity prices.

The trade surpluses contribute to Indonesia's improving current account deficit. The central bank (Bank Indonesia) announced that Indonesia's current account deficit eased to 1.83 percent of gross domestic product (GDP) in the third quarter of 2016, improving from a revised 2.2 percent of GDP deficit in the preceding quarter. These improving balances also manages to support the Indonesian rupiah rate. This is important because Indonesia's currency is very vulnerable to pressures stemming from the Donald Trump victory and looming Fed Funds Rate hike.

Trade Balance Indonesia