Institute for Research on Economics and Society – Faculty of Economics and Business – University of Indonesia

Macroeconomic Analysis Series: BI Board of Governor Meeting, July 2023

The inflation rate fell and succeeded in entering BI's target range of 3 ± 1%. Other indicators such as IKK and PMI also show that condition
The domestic economy remains solid with positive consumer expectations and expansive production activities. From the external side, the Fed's decision to maintain interest rates has given Indonesia the opportunity to maintain the yield difference between Government Bonds and US Treasury Bonds. This has had a positive impact, marked by the flow of funds into Indonesia and the strong performance of the Rupiah compared to the currencies of other developing countries. Considering this, we see that BI must maintain its policy interest rate at 5,75% to maintain Rupiah stability while monitoring the Fed's decision at the upcoming FOMC meeting.

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