Indonesia has been challenged by the continued increase in new Covid-19 infections, even though the number of people who have recovered is also increasing. In fact, for the first time, the number of people who recovered in one day has started to exceed the new cases. It is hoped that this development will become the new norm in the coming days.
In the midst of this uncertainty, the government has shared its optimism about the arrival of vaccines developed by Sinovac of China, which will be tested on a group of volunteers by the company's Indonesian partner. The Indonesian pharma company that has the relationship with the Chinese company is Bio Farma, a state-owned corporation, which has prepared for mass production in facilities once the development phases have been completed. Production in 2021 is planned at a level of 40 million vials and will be increased aggressively in the coming years.
There is certainly controversy on the efficacy of the newly developed vaccines. Some of the controversies are being driven by the fierce competition to become the first company capable of launching the vaccines. In this case, the cooperation between Sinovac and Bio Farma is interesting because it certainly makes the vaccines to be partly produced in Indonesia part of the controversy.
While optimistic about the future of the vaccines, the Indonesian government has continued its campaign on the virtues of Covid-19 protocols, such as maintaining physical distance, wearing face masks, always keeping hands clean, et cetera, and increasing the amount of testing and tracing massively. Therefore, while the number of infection cases has remained high, there has been a structural response by the government and the people, so that the chances of keeping new cases under control also remain high.
In economic news, the Central Board of Statistics reported that the trade balance in June 2020 registered a considerable surplus. Exports for the month reached $12,031.7 million, while imports reached $10,764.3 million, bringing the surplus for June 2020 to $1,267.4 million. Cumulative exports from January to June 2020 reached $76,410.0 million, while cumulative imports reached $70,907.1 million. Therefore, the cumulative surplus for the entire year 2020 stands at $5,502.9 million. The trade balance showed that the level of imports has started to approach normal levels.
The Central Board of Statistics also reported the Consumer Price Index for the month of June, which registered inflation of 0.18%. With that monthly inflation, Y/Y inflation in June reached 1.96%, a level below the Central Bank's target inflation corridor. Given that level of Y/Y inflation, Bank Indonesia decided to reduce the benchmark interest rate by 25 basis points to 4.00% at its Monetary Policy Meeting in July. This policy, together with the intervention by the Central Bank, has succeeded in strengthening market sentiment on Indonesia.
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