The quite large inflationary pressures last year were offset by BI's consistent monetary tightening efforts since last August. As a result, general inflation has consistently decreased and reached 5,28% (yoy) in January 2023. Heavy capital inflows since mid-January have appreciated the Rupiah to its strongest point at IDR14.875 and are currently starting to stabilize at around IDR15.090. Considering these various factors, plus the decreasing aggressiveness of monetary tightening by the Fed, we see that BI needs to hold the benchmark interest rate at 5,75% to maintain price and exchange rate stability.
while continuing macroprudential policies without disrupting the current momentum of economic recovery.

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