Indonesia’s exports fell by 6.6% in November compared to the same month last year. This is a bigger drop than the 2.31% decrease seen in October. This decline shows that Indonesia is facing ongoing challenges with global demand and economic conditions impacting its trade. Several factors, both domestic and international, are affecting Indonesia’s trade balance as the country tries to navigate these economic difficulties.

Increasing Challenges in Trade

We have been closely monitoring the steep decline in Indonesia’s exports, and the 6.6% drop in November 2025 confirms a troubling trend from October. This downturn indicates that slowing global demand is having a stronger effect on the economy than previously expected. As a result, the trade balance and growth outlook for the country are under significant pressure as the new year approaches. This situation points to a negative outlook for the Indonesian Rupiah (IDR). The recent drop of the IDR below the 15,950 per USD mark—a key psychological level—suggests that further depreciation may occur. Considering this, it may be wise to explore options like buying put options on the IDR or taking long positions in USD/IDR futures. The slowdown aligns with recent external data, including a decrease in China’s December 2025 manufacturing PMI to 49.7, indicating less activity in a crucial export market. Combined with lower prices for commodities such as palm oil—accounting for over 15% of Indonesia’s exports—the outlook for revenue driven by exports appears weak. This indicates that the underperformance of commodity-related equities may persist.

Market Implications and Strategies

In the equity markets, we should expect disappointing earnings reports from major export-focused companies in the fourth quarter of 2025, which will be released soon. Consequently, the IDX Composite index is at risk of a correction. Traders are encouraged to consider shorting IDX futures or buying protective puts on broad market ETFs to shield against this anticipated weakness. The economic slowdown, along with December 2025 inflation easing to 2.8%, provides Bank Indonesia with a solid reason to think about easing monetary policy. The market is likely to start factoring in a rate cut in the first quarter of 2026 to boost the economy. This makes long positions in Indonesian government bond futures increasingly appealing as yields are expected to decline. Create your live VT Markets account and start trading now.

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