Indonesia’s trade surplus rose slightly to USD1.27bn in February 2026. This extended 70 consecutive months of trade surpluses.
The report links the surplus to higher value-added exports and increased imports of capital goods. It also states that the trade balance may narrow in coming months.
The article points to risks from geopolitical tensions and global supply chain disruption. It says these factors could weaken Indonesia’s external position.
It describes downstream processing as a driver of export gains, with nickel cited as an example. It also mentions plans to extend this approach to iron and steel, coal, and refined fuels.
The Balikpapan refinery is noted as a potential extra export revenue source amid current Middle East tensions. The article also refers to ASEAN cooperation and reciprocal tariff arrangements as part of wider trade partnerships.
The February 2026 data shows Indonesia’s trade surplus is still strong, but the stated risks from geopolitical tension mean we should anticipate this surplus shrinking. Given the Rupiah has been relatively stable, trading around 15,750 per USD through March, this presents an opportunity. We should consider buying out-of-the-money USD/IDR call options expiring in the next quarter to position for potential IDR weakness.
We saw a similar situation in the third quarter of 2025 when worries about global supply chains caused a brief but sharp dip in the surplus, leading to a 2% slide in the Rupiah over three weeks. History suggests that even the perception of a narrowing surplus can trigger currency moves before the official data is released. This makes options a useful tool to pre-emptively position for such a swing with defined risk.
The mentions of global instability and supply chain disruptions suggest an increase in market volatility is likely. Implied volatility on USD/IDR options has already ticked up from its February lows, now standing at 8.2%. To capitalize on this, we could use straddles on the currency pair, which would profit from a significant move in either direction without needing to be right about the timing.
The analysis of specific sectors points toward a potential pair trade. While the Balikpapan refinery may boost refined fuel exports, the broader commodity space faces headwinds. We can structure a trade by buying call options on state energy firms set to benefit from the refinery, while simultaneously buying put options on nickel or coal miners who are more exposed to a global downturn.
Finally, the report’s note on rising capital goods imports is a key detail that directly contributes to a narrowing surplus. Bank Indonesia held rates steady in its last meeting, but this import trend could pressure their stance if the Rupiah weakens and fuels inflation. Therefore, using forward contracts to lock in a higher USD/IDR rate for future liabilities is a prudent hedging strategy for the coming weeks.
