Early Dry Season Prompts BI to Guard Against Price Rises in Chillies, Maize, and Rice

JAKARTA — Bank Indonesia is wary of the potential for price rises in several commodities. This risk arises alongside the changing dry season and the escalation of conflict in the Middle East.

Deputy Governor of BI Aida S. Budiman stated that pressures on volatile food inflation need to be closely observed.

The dry season is expected to be drier and arrive earlier. This condition risks disrupting food production.

Disruptions in production could drive up prices at the consumer level.

“This needs to be noted, particularly for horticultural commodities such as chillies, then maize, and also rice,” she said during the BI Board of Governors’ Meeting press conference for March 2026, on Tuesday (17/3/2026).

This situation could also push up prices of international commodities.

“We will continue to monitor developments from the Middle East War, how its escalation unfolds, and this will certainly have an impact on inflation,” she added.

Although there are risks, BI assesses that inflation remains within a controlled range. Inflation in February 2026 was recorded at 4.76 per cent.

BI views this increase as influenced by temporary factors. These factors stem from the base effect of the electricity tariff discount policy at the start of 2025.

“We will continue to observe this figure until around the March inflation. But overall, our inflation projection remains within the 2.5 per cent target plus or minus 1 per cent, although some recent developments require attention,” she explained.

BI is also synergising with the government through the Inflation Control Task Force (TPIP) and the Regional Inflation Control Task Force (TPID). Strengthening is being carried out through the implementation of the Inflation Control and Prosperous Food Movement.

These efforts aim to keep inflation under control in line with the target.