Inflation is sloping further after global price normalization and the implementation of various domestic price control programs. The economy also grew stronger than expected in the second quarter of this year, thanks to strong domestic demand. On the other hand, external pressure increased due to the Fed again raising interest rates at the FOMC in July. This results in portfolio outflows as well as currency depreciation in developing countries. Despite remaining one of the best performing currencies among developing countries, the Rupiah weakened as Indonesia's trade surplus shrank. BI needs to withstand external pressure on the Rupiah amid the potential for continued increases in the Fed's interest rates before the end of this year. Therefore, we believe that BI should maintain its benchmark interest rate at the current level of 5,75% while continuing to monitor the stability of the Rupiah and maintaining inflation.

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