Macroeconomic Analysis Series: BI Board of Governors Meeting, September 2024

Jahen F. Rezki (), Teuku Riefky (), Faradina Alifia Maizar () and Difa Fitriani ()
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Jahen F. Rezki: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Teuku Riefky: 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)
Difa Fitriani: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)

No 202409, LPEM FEBUI BI Board of Governor Meeting Brief from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: In August 2024, Indonesia's headline inflation eased slightly to 2,12% (yoy) from 2,13% in July 2024, mainly due to lower food prices. Core inflation rose to 2,02% (yoy), driven by higher prices of gold jewelry, coffee, and education. The rupiah strengthened to Rp15.395/USD in mid-September, supported by strong capital inflows, and foreign exchange reserves reached a record USD150,2 billion. Although the current inflation rate, the strengthening rupiah, and expectations of a Fed rate cut in September 2024 create a favorable backdrop, Bank Indonesia should maintain the BI rate at 6,25% at its September meeting. This approach will help prevent potential currency volatility and manage risks associated with sudden capital outflows.

Keywords: gdp; —; economic; —; economic; outlook; —; inflation; —; macroeconomics; —; interest; rate (search for similar items in EconPapers)
Date: 2024-09, Revised 2024-09
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