Even though it exceeded the upper limit of BI's target, the spike in price levels in June 2022 was in the cost-push inflation category, mainly driven by an increase in volatile commodity prices. On the other hand, core inflation is still there
at a relatively safe level within BI targets. Judging from macroeconomic indicators, the economic recovery appears to be continuing in line with expectations. This is shown by the IKK level which is still recorded in optimistic territory. Apart from that, the "blessing" of high commodity prices also benefits trade performance, resulting in the ability to record a very large surplus. However, risks from the external sector continue to overshadow domestic market conditions. The continued strong performance of the USD also adds to external pressure. The results were then quite clear, as evidenced by the large capital outflow followed by the depreciation of the Rupiah. However, BI should not rush to tighten its policies because this could result in slowing economic growth. Therefore, we see that BI needs to continue to maintain the policy interest rate at 3,50% while paying close attention to external dynamics.

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