Analyst: March Inflation at 0.52%, Rupiah Weakens
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Editor
4 April 2024 12:01 WIB
TEMPO.CO, Jakarta - The Director of Laba Forexindo Berjangka Ibrahim Assuaibi predicts that the rupiah will continue to weaken against the US Dollar today. He estimates that the rupiah exchange rate will fluctuate and close with a downward trend at Rp15,910 to Rp15,960 in trading. The rupiah closed weak at Rp15,920 per US Dollar on Wednesday.
Ibrahim said Indonesia's inflation rate in March 2024 was recorded at 0.52 percent month-on-month (m-o-m) or 3.05 percent year-on-year (y-o-y). According to him, economists predict this April's inflation rate to remain high. The inflation realization in March 2024 is still within this year's target range of 1.5 to 3.5 percent. However, this figure is the highest estimate since August 2023, Ibrahim said, adding that “food prices experience the most significant increase in the last 18 months, coinciding with Ramadan and before the Eid al-Fitr celebration”.
Ibrahim stated that the rise in inflation in March 2024 was mainly driven by volatile price inflation, especially food prices, which are influenced by factors on the supply and demand sides.
In addition, the domestic food supply also continues to be disrupted due to the ongoing impact of El Nino, albeit on a lower scale. Meanwhile, demand for food materials increased due to the seasonal impact of Ramadan. "There is potential for continued short-term inflation risks, especially in April 2024 which coincides with the Eid momentum."
According to Ibrahim, inflation risks related to food prices will ease as the El-Nino effect wanes in the second semester of 2024. However, inflation pressure in the second semester of 2024 could arise from core inflation due to excise tax implementation on plastic and sugar-sweetened packaged beverages.
Ibrahim also explained several external factors on the inflation risk, including the high-interest rate and the recent earthquake in Taiwan and Japan.
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