Being in the middle of BI's target range, general inflation is currently at 2,51% (yoy) in June 2024, slowing down from the May 2024 figure of 2,84% (yoy). The slowdown in general inflation is due to falling food prices after the harvest season and low demand after Eid al-Fitr celebrations which end in April 2024. As the Fed is currently taking a more dovish stance, capital flows have flowed into emerging markets and the Rupiah has appreciated significantly over the past few weeks, it is currently hovering around IDR 16.110/USD, marking a 2,23% increase over the past month. In addition, Indonesia's foreign exchange reserves increased by around USD 1,2 billion, from USD 138,97 billion in May to USD 140,18 billion in June 2024. Under these conditions, Bank Indonesia needs to maintain its policy interest rate at 6,25% this month .
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