After the spread of the Delta variant in the period June to September last year, Indonesia is now faced with a new wave of the Omicron variant. As of February 7 2022, additional daily cases reached more than 27.000 cases (7-day moving average). This number is expected to continue to increase until the peak of the Omicron wave which is predicted to occur at the end of February. On the other hand, several economic indicators still show progressive growth even though new cases continue to emerge. Economic growth in Quarter IV 2021 recorded quite good growth with growth of 5,02% (yoy). Similar to economic growth, the inflation rate also increased from 1,84% (yoy) in December to 2,18% (yoy) in January. However, this figure is not expected to last long as the number of positive Omicron cases increases. From the external side, several central banks have started to raise interest rates in line with ongoing inflationary pressures. As a result, corrections in the domestic market in the short term are inevitable, marked by capital outflows and weakening of the Rupiah exchange rate. Considering the existing situation, Bank Indonesia needs to maintain interest rates at 3,50% this month while monitoring domestic market conditions and anticipating fluctuations that will occur in the global market.
