Inflation in November 2024 fell to 1,55% (yoy) and reached its lowest point since April 2021. The lower inflation figure in November 2024 was mainly driven by lower food inflation and volatile food price deflation due to the high-base effect and abundant food supplies after the harvest season. Capital markets in various developing countries have been under pressure in the past two months amid concerns over potential tariff increases on imported goods to the US under the Donald Trump administration. As a result, Indonesia has experienced capital outflows of around USD0,75 billion since mid-November and the Rupiah has depreciated by 1,39% (mtm) from IDR15.770 per USD to IDR15.990 per USD in the past 30 days. Given the significant pressure on the Rupiah, we believe that BI needs to maintain its benchmark interest rate at 6,00% in this month's Board of Governors meeting.
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