Indonesia’s exports fell by 3.1% in March. This followed a 1.01% reading in the previous period.
The March figure shows exports moved from growth to decline. No further breakdown or cause was provided in the release.
Implications For Rupiah And External Demand
We are looking at the March export data, which shows a significant drop to -3.1% after a small gain the month before. This reversal points to weakening external demand and puts immediate downward pressure on the Indonesian Rupiah (IDR). This is particularly concerning as recent data showed China’s manufacturing PMI dipping just below 50, suggesting demand from our largest trading partner is contracting.
In the coming weeks, we should anticipate the USD/IDR currency pair testing higher levels as the rupiah weakens. We can position for this by considering long positions in USD/IDR forwards or by purchasing call options on the pair to limit our risk. This setup reminds us of the volatility we saw in mid-2025 when a similar slowdown in global commodity demand led to a rapid 2% depreciation in the IDR over a few weeks.
This export weakness will also likely weigh on the earnings of major companies on the Jakarta Composite Index (JCI). We are therefore exploring protective strategies, such as buying put options on the JCI or related ETFs to hedge against a potential market dip. With inflation having remained sticky around 2.9% late last year, Bank Indonesia has little room to cut its 6.0% policy rate to support growth, adding another layer of risk for equities.
