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Macroeconomic Analysis Series: BI Board of Governors Meeting, September 2024

Author

Listed:
  • Jahen F. Rezki

    (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))

  • Faradina Alifia Maizar

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

  • Difa Fitriani

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

Abstract

In August 2024, Indonesia's headline inflation eased slightly to 2,12% (yoy) from 2,13% in July 2024, mainly due to lower food prices. Core inflation rose to 2,02% (yoy), driven by higher prices of gold jewelry, coffee, and education. The rupiah strengthened to Rp15.395/USD in mid-September, supported by strong capital inflows, and foreign exchange reserves reached a record USD150,2 billion. Although the current inflation rate, the strengthening rupiah, and expectations of a Fed rate cut in September 2024 create a favorable backdrop, Bank Indonesia should maintain the BI rate at 6,25% at its September meeting. This approach will help prevent potential currency volatility and manage risks associated with sudden capital outflows.

Suggested Citation

  • Jahen F. Rezki & Teuku Riefky & Faradina Alifia Maizar & Difa Fitriani, 2024. "Macroeconomic Analysis Series: BI Board of Governors Meeting, September 2024," LPEM FEBUI BI Board of Governor Meeting Brief 202409, LPEM, Faculty of Economics and Business, University of Indonesia, revised Sep 2024.
    • Handle: RePEc:lpe:gomeet:202409
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    File URL: https://lpem.org/repec/lpe/queouts/BBG202409.pdf
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