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Indonesia Policy Rate 6.25% (consensus 6.25%) in Jul-24

• Bank Indonesia kept its policy at 6.25%, aligning with market expectations to ensure inflation control and Rupiah stabilization amid ongoing global financial uncertainties.
• Future interest rate decisions will be influenced by persistent global financial market uncertainty, particularly the US monetary policy direction, and strong domestic economic growth driven by robust consumption and investment.
• Ensuring Rupiah stability and maintaining inflation within the 2.5 ± 1% target range remain central to Bank Indonesia’s strategy, supported by a mix of pro-market monetary operations, macroprudential policies, and digitalization efforts to foster economic resilience and growth.

Indonesia CPI Inflation 2.51% y-o-y (consensus 2.7%) in Jun-24

- Indonesia's CPI inflation in June 2024 decelerated to 2.51% year-on-year, below consensus and previous month figures, marking the lowest growth since September 2023 and indicating weak price pressures relative to historical averages.
- Core CPI inflation at 1.9% in May 2024 points to contained underlying inflation, but higher PPI inflation and robust M2 growth suggest potential future inflationary pressures.

Indonesia Policy Rate 6.25% (consensus 6.25%) in Jun-24

• Bank Indonesia kept the BI-Rate unchanged at 6.25%, aligning with market expectations to manage inflation and stabilize the Rupiah amid global uncertainties.
• Future interest rate decisions will be influenced by global financial market dynamics, particularly US monetary policy shifts, and the strong performance of the domestic economy driven by robust consumption and investment.
• Ensuring Rupiah stability and maintaining inflation within the 2.5 ± 1% target range remain central to Bank Indonesia’s strategy, supported by monetary, macroprudential, and payment system policies to foster sustainable economic growth.

Indonesia CPI Inflation 2.84% y-o-y (consensus 2.9%) in May-24

- Indonesia's CPI inflation for May 2024 was 2.84%, slightly below the consensus and indicative of subdued inflationary pressures relative to the average.
- Core CPI inflation and broader M2 money supply figures suggest mild underlying inflation against a backdrop of higher producer price inflation, indicating a potential absorption of costs within the supply chain.