Stood at 2.61% (y.o.y) in December, Indonesia’s inflation rate throughout 2023 has shown a downward trend and been successfully kept within BI’s target range. The 2023 inflation realization is substantially below 2022 full-year  inflation figure that reached a staggering level of 5.51% (y.o.y) due to skyrocketed commodity and energy prices. Before 2022, full-year inflation always fell short of 2% lower-band BI’s target range due to muted aggregate demand during Covid-19 period (1.68% (y.o.y) in 2020 and 1.87% (y.o.y) in 2021). On external front, Indonesia consistently maintained trade surplus throughout 2023; it was recorded at USD3.3 billion in December 2023. Relative to its peers’ currency, Rupiah performed rather unimpressive in the first two weeks of 2024 despite being rather stable. Considering  these factors, we view that BI should hold its policy rate at 6.00% this month.