Ignoring Shrinkflation, BI 7DRRR remains at 3.50%. Producers attempt to reduce product size but maintain prices, in order to increase margins amid rising raw material prices and supply shortages, or Shrinkflation. Consumers are more sensitive to price increases than size contraction. Meanwhile, BI’s decision to maintain the BI 7DRRR 3.50% because it uses the Core Inflation reference and not Headline Inflation, complements Foreign Reserves which are maintained at USD136.4 billion and Capital Outflows which are still being monitored. Last week, all sectors posted gains except Healthcare. The Government’s decision to extend the relaxation of medical equipment imports has become a positive catalyst, after the Pharmaceutical Sub-sector was previously faced with the challenge of rupiah depreciation.
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