Headline inflation eased to 2.57% (y.o.y) in January 2024 approaching the new target mid-point of 2.5%. Diminishing impact of El-Nino weather phenomenon on food prices, distribution of social assistance to control food volatility, and lessen effect of year-end seasonal effect drove inflation down in the first month in 2024. Trade balance is still in positive territory although has been declining since April 2022. Considering the Fed will not lower its policy rate in the coming months, we view that BI should maintain BI Rate at 6.00% this month to maintain exchange rate stability.

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