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BI Board of Governor's Meeting, May 2023

Author

Listed:
  • Jahen F. Rezki

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Syahda Sabrina

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Nauli A. Desdiani

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Teuku Riefky

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Amalia Cesarina

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Meila Husna

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Faradina Alifia Maizar

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

Abstract

Headline inflation is gradually subsiding with steady core inflation that indicates strong and manageable domestic demand. Externally, the less aggressive monetary tightening from the Fed and attractive yield spread have accommodated capital inflows to Indonesia. As a result, Rupiah is appreciating to the strongest level reaching IDR14,670 in early May supported by the rush upsurge in capital flows following the announcement of higher-than-expected Indonesia’s Q1-2023 economic growth of 5.03% (y.o.y). We view BI should hold its policy rate at 5.75% this month while planning to set the accommodative monetary policy to enhance external resilience amid potential global slowdown this year.

Suggested Citation

  • Jahen F. Rezki & Syahda Sabrina & Nauli A. Desdiani & Teuku Riefky & Amalia Cesarina & Meila Husna & Faradina Alifia Maizar, 2023. "BI Board of Governor's Meeting, May 2023," LPEM FEBUI BI Board of Governor Meeting Brief 202305, LPEM, Faculty of Economics and Business, University of Indonesia, revised May 2023.
    • Handle: RePEc:lpe:gomeet:202305
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    File URL: https://www.lpem.org/repec/lpe/queouts/BBG202305.pdf
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    Keywords

    gdp — economic — economic outlook — inflation — macroeconomics — interest rate;

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