During its worst point in early 1998 Indonesia’s inflation rate reached almost 13% in one particular month alone, a dramatic rise from the 1997 level of 10.3% for the whole year. In response, we adopted a tight monetary policy, and work in a very tight discipline to adhere to the preset targets of monetary aggregates on a day-today basis.
These efforts, together with the policy actions to secure the supply of basic necessities, have been rewarded. The monthly inflation rate started to decline to a more ‘normal’ level in the last quarter of 1998. We even recorded a negative inflation rate of 0.3% in October.