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Macroeconomic Analysis Series: BI Board of Governor Meeting, April 2025

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

  • Mervin Goklas Hamonangan

  • Hardy Salim

  • Alif Ihsan A Fahta

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

Abstract

Indonesia experienced its first positive headline inflation in 2025 on March. Recorded at 1.03% (y.o.y), headline inflation increased from -0.09% (y.o.y) in the previous month. The rebound of inflation into positive territory was mainly reflected the end of the 50% electricity tariff discount which was in effect during January-February 2025. Headline inflation is expected to rise gradually as these temporary price controls are phased out. Increased demand and mobility driven by the religious festivities, along with extended long weekends, are likely to exert further upward pressure on prices. On the other hand, The rapid escalation of ‘tit-for-tat’ retaliatory strategies between US and China has further deteriorated the global uncertainty. In the past 30 days, the accumulated capital outflow from Indonesia reached around USD1.99 billion and a depreciation of Rupiah by 2.59%. Considering this, BI might have no room for any policy rate cut as it could exert more pressure on the Rupiah. Given this situation, BI should maintain its policy rate at 5.75% in the April 2025 Board of Governors Meeting and remain vigilant in the currency intervention efforts.

Suggested Citation

  • Jahen F. Rezki & Teuku Riefky & Faradina Alifia Maizar & Difa Fitriani & Mervin Goklas Hamonangan & Hardy Salim & Alif Ihsan A Fahta, 2025. "Macroeconomic Analysis Series: BI Board of Governor Meeting, April 2025," LPEM FEBUI BI Board of Governor Meeting Brief 202504, LPEM, Faculty of Economics and Business, University of Indonesia, revised Apr 2025.
    • Handle: RePEc:lpe:gomeet:202504
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