Indonesia’s annual inflation rate held steady at 2.12% in August, within the central bank’s target range. Bank Indonesia maintains high interest rates to anchor the rupiah amid global market volatility.
Bollywood Fever: Indonesia’s annual inflation rate remained steady at 2.12% in August, virtually unchanged from July’s 2.13%, according to official data released on Monday.
The inflation rate continues to stay comfortably within Bank Indonesia’s (BI) target range of 1.5% to 3.5%, in line with market expectations.
August’s headline inflation rate is the lowest since February 2022 and matched the forecast from a Reuters poll.
The slight increase in core inflation to 2.02% from July’s 1.95% was also noted, coming in just above the poll’s forecast of 1.98%.
Inflation in Southeast Asia’s largest economy has been within BI’s target range since mid-2022. Despite this, the central bank has maintained relatively high interest rates, focusing on stabilizing the rupiah currency and managing global market volatility.
This cautious approach underscores BI’s commitment to anchoring currency stability amid fluctuating global economic conditions.
BI Governor Perry Warjiyo has indicated that currency stability remains the policy priority for the current quarter.
However, he also suggested that there may be room for monetary policy easing in the next quarter to stimulate economic growth.
As Indonesia navigates the challenges of global economic uncertainty, BI’s balanced approach to monetary policy will be crucial in maintaining economic stability while also supporting growth.
The steady inflation rate provides some reassurance that the central bank’s strategy is effectively managing the delicate balance between inflation control and currency stability.
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