The economy grew slightly above expectations amidst global uncertainty throughout 2018 with the highest growth recorded since 2014 at 5,17% (yoy). Strong fundamental conditions can also be seen in low and stable inflation. The appreciation trend of the Rupiah, which was below IDR 14.000 in early February, was driven by the rapid capital inflows since October 2018. External pressures that previously threatened the market are slowly easing along with the global weakening that is almost certain to occur in the next two years; This will contribute to weakening commodity prices. This trend creates challenges for the trade balance in the future. On the other hand, crude oil prices will continue to be a source of uncertainty for the Rupiah in 2019; prices have touched their highest in the last three months due to supply cuts by producers. Overall, we view that BI needs to maintain its policy interest rate at the Board of Governors Meeting this month.

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