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FX News: Indonesian Rupiah to Continue Higher

Southeast Asia’s largest economy posted a trade surplus in August — the first in five months — as the country’s imports on consumption and capital goods slowed.

The news came as relief for the depreciating rupiah, yet analysts and economists in Jakarta said the prospect of the country’s economy and the rupiah for the remainder of the year still remains bleak.

Data from the Central Statistics Agency (BPS) showed on Tuesday that the country posted a trade surplus of $130 million in August alone, a swing from record-high trade deficit of $2.3 billion in July. Still, in the January-August period the country posted a $5.54 billion deficit in its trade to other nations.

“This news calms down the market, which has been anxious about weak trade data. It should be temporarily positive to the rupiah,” said Purbaya Yudhi Sadewa, chief economist at Danareksa Research Institute.

“Don’t be too excited yet, take a close look on what causes the surplus. It was mainly not because of stronger exports, but imports overall weakened. This shows slowing economic activity,” Purbaya said.

The rupiah gained ground, trading at 11,593 against the dollar in Jakarta on Tuesday. The currency has fallen by 20 percent so far this year, according to data from the central bank, Bank Indonesia.

http://www.livetradingnews.com/fx-news-indonesian-rupiah-continue-higher-12209.htm#.Uk8gqxCc5i0