July 30, 2018 / 5:14 AM / a year ago

Indonesia's inflation rate seen increasing slightly in July

JAKARTA (Reuters) - Indonesia’s annual inflation rate in July likely increased slightly due to higher food prices, though the pace remained inside the central bank’s target range, a Reuters poll showed.

The consumer price index (CPI) is expected to have climbed 3.24 percent in July, according to the median forecast of 12 economists polled by Reuters, fractionally above June’s 3.12 percent annual pace.

Maybank Indonesia’s chief economist Juniman cited rising prices of chicken, eggs and beef as well as non-subsidized fuel as the main reasons for the increase.

Perry Warjiyo, Bank Indonesia (BI) governor, told reporters on Thursday that for all of 2018, the central bank expects the headline inflation rate to be around 3.5 percent, the midpoint of BI’s 2.5-4.5 percent target range.

In the poll, July’s annual core inflation rate, which excludes government-controlled and volatile food prices, was seen at 2.74 percent, just a touch above June’s 2.72 percent pace.

BI, whose mandate is to control the rupiah’s level through the inflation-targeting framework and management of its exchange rate to the U.S. dollar, has raised its benchmark policy rate IDCBRR=ECI three times since mid-May, by a total of 100 basis points, to 5.25 percent.

Reporting by Nilufar Rizki and Tabita Diela, Writing by Gayatri Suroyo

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