REPUBLIKA.CO.ID, JAKARTA - Indonesia posted an unexpectedly large trade surplus in February helped by a drop in imports, in a sign the economy is making progress in managing its current-account deficit.

Moderating inflation and more evidence a mineral export ban was not badly denting the country's exports, may also buoy investor confidence and give Bank Indonesia more leeway to leave interest rates stead, analysts said.

Southeast Asia's largest economy appears to have turned a corner this year with its troubling current-account deficit narrowing, but remains vulnerable to emerging market volatility. The country's trade balance reverted to a 790 USD million surplus in February, from a 440 USD million deficit in January, better than analysts' expectations and even beating the central bank's bullish estimate of 760 million USD.

Edimon Ginting, deputy country director of the Asian Development Bank, said the government had taken steps to lower the current-account deficit by slowing consumption and boosting exports but warned that the effects would wane in coming years.

"The impact may be relatively short-lived. Longer-term strengthening of the current account requires structural reforms to achieve sustained gains in productivity and competitiveness," he said in a statement.

Exports in Febrary fell 2.96 percent from a year earlier, more than a Reuters poll of analysts predicting a drop of 1.24 percent. Imports, an Achilles heel for the G-20 economy, fell by a sharper-than-expected 9.98 percent from the same period a year earlier, double expectations for a fall of 4.30 percent.

The rupiah briefly turned firmer in the one-month non-deliverable forwards against the dollar after the positive trade data. But it eased again on profit-taking. Spot rupiah also gave up some gains on caution over possible intervention by the central bank to stem the currency's gains.

Bank Indonesia is not expected to alter its monetary policy as it monitors improving fundamentals, analysts said.

"The trend of a positive trade balance will potentially continue throughout this year ... with an easing current-account deficit, slowing inflation and stable rupiah, tighter monetary policy is less likely," said Josua Pardede, economist at Bank Internasional Indonesia in Jakarta.

Bank Indonesia has said it has no plans to loosen monetary policy this year, as economic recovery is still under way and there is the possibility of the Federal Reserve raising rates. But Pardede said the central bank may lift interest rates in the second half of 2015, if the Federal Reserve raises rates.

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