Indonesia: Improving trade balance – ANZ

According to ANZ analysts, Indonesia’s latest trade data signals alleviating pressure on the current account deficit, but the improvement in the external balance was driven by a sharp fall in imports and comes at the expense of growth.

Key Quotes

“The IDR has been reasonably resilient despite rising geopolitical risks and global oil prices following an attack on Saudi Arabia’s key oil facilities.”

“A 25bp cut by Bank Indonesia on 19 September to take the policy rate to 5.25% looks to be on the cards.”

“We are maintaining our forecast for a total of 100bps of cuts in BI’s current easing cycle for now, but acknowledge that the risk of deeper cuts is rising.”