Falling import demand, reduced foreign bond holdings narrows Q2 deficit

first_img“The narrowing CAD was driven by a trade surplus as a result of declining imports amid weakening domestic consumption and decreasing yield payments to foreign investors, with the domestic economy contracting in the second quarter,” the central bank said in a statement.Indonesia’s total imports fell $9.7 billion year-on-year in April-June to $31.74 billion to book a trade surplus of $2.88 billion in the second quarter, according to Statistics Indonesia (BPS) data.Meanwhile, foreign investors reduced their holdings of domestic financial instruments, including government bonds, in quarter two. The Finance Ministry recorded a fall in foreign ownership of sovereign debt papers from 39 percent at the beginning of the year to 29.6 percent in July, which also reduced dividend payments to foreign investors.BI also noted that the service trade deficit increased slightly due to a significant drop in foreign tourist arrivals as a result of COVID-19 travel restrictions and a decline in remittances from Indonesia’s migrant workers. Indonesia’s current account deficit (CAD) narrowed in the second quarter of the year as import demand fell and foreign ownership of government bonds declined, Bank Indonesia (BI) announced on Tuesday.The CAD narrowed in the second quarter to US$2.9 billion, down from 1.4 percent of gross domestic product (GDP) in the first quarter to 1.2 percent of GDP in quarter two.Southeast Asia’s biggest economy also recorded a $9.2 billion balance of payments (BOP) surplus in the second quarter, whereas it had recorded a $8.5 billion BOP deficit in the first quarter. Meanwhile, the central bank said that portfolio capital inflows were restored in the second quarter with $10.5 billion in portfolio investment and foreign direct investment, following significant outflows in March when COVID-19 was declared a pandemic. In contrast, the country recorded a $3 billion deficit in its financial and capital accounts in January-March.Government and corporate issuance of global bonds, as well as purchases of sovereign debt papers, had contributed to restoring inflows in the second quarter.“Capital inflows were driven by increasing global liquidity, the attractive yields of domestic instruments and sustained investor confidence in the Indonesian economy,” the central bank said.Separately, Bank Mandiri chief economist Andry Asmoro said: “Going forward, we see import growth will remain weaker than export growth due to the halt in some domestic investment and production activities amid the uncertainties related to the COVID-19 pandemic.”“This may maintain a surplus in the trade balance and will hence result in a shrinking CAD, which in turn will support the balance of payments and ultimately foreign reserves,” he added, saying that he estimated the annual CAD to be at around 1.49 percent of GDP.Similarly, Fitch Solutions also forecast that Indonesia’s CAD would amount to 1.5 percent of GDP this year, down from its initial projection of 1.9 percent of GDP.“Import demand in Indonesia is likely to continue suffering due to the COVID-19 outbreak, which has hit the domestic economy significantly,” said a research note dated Aug. 18 from Fitch Solutions country risk and industry research.Service exports are projected to collapse by at least 25 percent this year due to the closure of Indonesia’s tourist industry.Fitch Solutions said that Indonesia remained well placed from a funding perspective, despite its less sanguine view on investment inflows. It also said it was “likely that investors’ sentiment will remain weak throughout the year and as such, much of the funding of the current account deficit will be dependent on the country’s ability to furnish its foreign exchange reserves”.Indonesia has posted a trade surplus in the second quarter of 2020, primarily due to a decline in import demand.Topics :last_img read more

Barewa Beats Cowrie to Retain President’s Cup

first_imgMan-of-the match and Barewa Captain, Nuhu Ibrahim created the second try after picking the ball from a loose ruck before releasing Muhammed wide on the left for Barewa’s second try in the 60th minute.Cowrie without their captain Onoru Jatto and wing man, Christian Ogar, launched endless attacks on the Barewa defence, forcing their full back Gabriel John to make three try saving tackles deep inside the their half.Cowrie eventually made a try of their own when a quick penalty was taken and ball quickly moved wide left from Azeez Olanrewaju to Jeremiah to cross the whitewash and Barewa held on for their back-to-back win.Cowrie dominate the scrum and breakdown.The Lagos league champions determined to add the trophy to their cabinet decided to throw bodies into the ruck and they succeeded in halting Barewa’s momentum.Cowrie dominated the scrum by pushing Barewa five to ten meters backwards most times and disrupted the Kano team’s line-out dominance for most part of the game.‎Despite spirited fight from Cowrie, Barewa won by 13-5.National rugby team, the Black Stallion’s captain who starred for Cowrie, Azeez Ladipo, blamed lack of adequate preparations for they loss suffered in the hands Barewa.“I think it has to do with our preparations, it wasn’t right for this. We did all we could but the guys are already winding down for the year and most of them are not around.”We just had to gather the players around for this game. That is not an excuse though; we just lost to a better prepared team,” Ladipo admitted.Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegram Barewa Rugby Club of Kano became the back-to-back champions of President’s Cup at the weekend. It defeated Cowrie Rugby Club of Lagos at the Mainbowl of National Stadium, Surulere, Lagos last Saturday.Tries from Joshua Etim and Sani Muhammed helped the northern champions into a 13-0 lead, but Cowrie hit back through Jeremiah Peters through unconverted try.Both teams brought in their kicking game in a strong contest for territory after which Joshua Etim dotted down in the 30th minute to put Barewa ahead.last_img read more