After several months of great pressure on prices and exchange rates, Indonesia is now in better condition. Thanks to the easing of El-Nino and active intervention by the Government, headline inflation fell to 3,00% (yoy) in April 2024 from 3,05% (yoy) in the previous month. From the external side, indications of easing economic pressure in the US, reduced geopolitical tensions, and BI's policy mix encouraged capital inflows and triggered stability in the Rupiah exchange rate. Considering these various aspects, it seems that there is no need for BI to change the policy interest rate at the next Board of Governors Meeting. Therefore, we are of the view that BI needs to hold its benchmark interest rate at 6,25% in May 2024.

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