News ID: 235759
Published: 0759 GMT December 14, 2018

Indonesia's November trade deficit seen narrowing as import growth slows

Indonesia's November trade deficit  seen narrowing as import growth slows

Indonesia is expected to post a smaller trade deficit in November compared with a month earlier, a Reuters poll showed on Friday, in a relief to the central bank which has been raising rates to defend the rupiah.

The gap for November was seen at $830 million, according to the median forecast of 12 analysts, about half of October’s revised deficit of $1.77 billion, Reuters reported.

Authorities in Southeast Asia's largest economy have taken measures to control imports after soaring bills in the middle of this year widened the country's current account deficit and hurt the rupiah exchange rate IDR.

The measures range from raising import tariffs and delaying big, import-heavy infrastructure projects, to a 175 basis point increase in the central bank’s key policy rate.

Analysts in the poll estimated import growth to slow to 10.50 percent in November from a year earlier, compared to October’s annual increase of 23.99 percent.

However, exports were still expected to remain sluggish with a 3.95 percent year-over-year growth in November, slower than a revised 4.21 percent increase in October.

“Indonesia’s persistent trade deficit remains the main negative for the rupiah,” ING said in a note, adding that its expectation that the deficit would shrink to $1.6 billion in November “should be some relief for the central bank”.

Portfolio inflows have helped the rupiah strengthened over the past weeks, though it is still down about seven percent against the dollar this year.

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