MACROECONOMIC ANALYSIS SERIES: BI Board of Governor Meeting, September 2021

Lower trend of Covid-19 daily cases has brought some positive signals to the macroeconomic and financial indicators. This was marked by the mild improvement in Manufacturing Purchasing Managers’ Index (PMI). On the external side, support from IMF also eases the instability in the near future. However, since partial lockdown (PPKM) is still in place, the recovery plans are becoming rather limited. This is shown by softer-than-expected inflation as well as the Consumer Confidence Index (CCI) that continues to drown. The mutation of Covid-19 virus to several variants ranging from MU, Lambda, and C.1.2 also put another jeopardy and uncertainty to the health condition in particular and future economic stability in general. Therefore, given the circumstances we see that BI should hold its policy rate at 3.50% while carefully observing the trend of Covid-19 development and maintaining a stable financial condition.

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