Headline inflation accelerated to 3.05% (y.o.y) in March 2024. For the past six months, rising food prices have been the primary driver of annual inflation, influenced by a delayed harvest season, which has shifted to late March 2024  to April 2024. This month, increasing food prices were further exacerbated by increased demand for food commodities during Ramadan. Rupiah has been facing an enormous currency pressure and surge in capital outflow in the past two weeks, triggered by Middle East geopolitical tension and the ‘high-for-longer’ sentiment by the Fed. However, increasing policy rate might be costly to the real sector and BI has several policy options that can be utilized further supported by ample amount of reserves. Thus, we are in the view that BI should hold its policy rate at 6.00% for now.