Trade Balance Deficit: The Highest Since July 2013
July’s trade balance posted the deficit of USD2.03 billion consisting of the deficit of USD842 million and USD1.2 billion respectively in non-oil & gas and oil & gas. Meanwhile, exports only nudged up 19.33%, but imports soared by 31.56%. The steep surge was attributable to the soaring consumption imports by 60.75%, raw material imports by 30.07%, and capital goods imports by 24.81%. Therefore, the Indonesian Government plans to curb imports of consumption goods and capital goods, and reduce oil and gas imports through the mandatory use of B20.
BI’s Stance of Higher Benchmark Rate
Bank Indonesia (BI) raised its benchmark rate, BI-7 Days Reverse Repo Rate, by 25 bps to 5.5%. The monetary stance is an effort to stimulate the sluggish domestic financial market as the prolonged trade war tension and the uncertainty of the Fed’s rate hike. Indeed, it aims at controlling the exchange rate and current account deficit to stand stably at the safe zone.
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