BI Board of Governor's Meeting, March 2023

Jahen Rezki, Syahda Sabrina (), Nauli A. Desdiani (), Teuku Riefky, Amalia Cesarina, Meila Husna () and Faradina Alifia Maizar ()
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Syahda Sabrina: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Nauli A. Desdiani: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Meila Husna: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Faradina Alifia Maizar: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)

No 202303, LPEM FEBUI BI Board of Governor Meeting Brief from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: The inflation figure moved in reverse direction as it increased to 5.47% (y.o.y), after a downward pattern since September 2022. This mainly contributed by the combination of supply disruptions due to the occurrence of flood during the harvest season and the low base effect that played a role. From the external side, the expectation of another aggressive rate hike by the US has pushed the fund to leave Indonesia with capital outflow recorded at USD938 million since mid-February 2023. However, the recent tragedy of SVB may force the Fed to be less aggressive in tightening its monetary policy in the near future. The push to delay monetary tightening by the US shall create a momentum of flow of funds to enter the emerging markets, including Indonesia. On the other hand, domestic currency has finally stabilized after a series of depreciation with Rupiah now standing around IDR15,367. Considering those factors, we view that BI should hold its policy rate at 5.75% this month while continuing to apply macroprudential measures to support the growth momentum.

Keywords: gdp; —; economic; —; economic; outlook; —; inflation; —; macroeconomics; —; interest; rate (search for similar items in EconPapers)
Date: 2023-03, Revised 2023-03
New Economics Papers: this item is included in nep-des and nep-sea
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