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Indonesia's annual inflation up in June
Last Updated(Beijing Time):2012-07-02 13:44

Indonesia annual inflation in June accelerated at the faster pace, allowing the central bank to keep its basic rate unchanged on its meeting earlier this month, as pressures on rupiah and food prices continues.

Head of National Statistic Bureau named only Suryamin on Monday that the inflation in June rose to 4.53 percent on yearly basis as the food prices increased, after accelerating at 4.45 percent in May.

Analyst from CIMB Niaga bank Winu Wardana said that the central bank was likely to keep the rate steady on its meeting this month as the crisis settlement in Europe and inflation pressures may increase ahead of the Islamic holymonth of Ramadhan and Islamic festivity and starting of new term in schools.

"The central bank may keep rate unchanged as the settlement of economic crisis in Europe still does not show any significant progress," he told Xinhua by phone on Monday.

"Besides, food prices and transport cost are going to increase in Ramadhan and the festivity, while new school term is to began. The core inflation has shown a trend of increase," said Wisnu.

The rupiah has weakened to 9,480 against one U.S. dollar on Monday from the level of about 9,200 in last two months, according to the central bank data before midday.

The central bank has extended pause of cutting its basic rate on its meeting in June 12 for a four straight month after cutting it by 75 basis points at the end of last year and 25 basis at the beginning of this year.

On monthly basis, Suryamin said that the inflation in June rose by 0.62 percent, higher than the previous month of 0.07 percent

Core inflation that exclude volatile food and energy prices 4. 15 percent in June on yearly basis after reaching 4.14 percent in May, he said.

The government forecasts the economy to expand by 6.5 percent this year but the central bank said on June 12 that the economy would likely to accelerate at the bottom end of its 6.3 percent to 6.7 percent prediction range.

The government forecasts the inflation to reach 6.8 percent this year.

President Yudhoyono administration seems not to raise oil price in coming months as the global oil price hike has shown a trend of decline. The government has got a conditional right to increase oil price should the difference of the Indonesia crude oil price, assumed in the state budget of 105 U.S. dollar per barrel, reach 15 percent above the global oil prices in average of six months.

The central bank recently issued a term deposit facilities in U. S. dollar as an effort to support rupiah against the dollar. Previously the central bank governor Darmin Nasution bank has said that it would boost intervention on currency market to ease rupiah volatility.

The central bank spokesman Difi Johansyah has said the central bank would continue to supply dollars to the market to stabilize rupiah volatility and make it in line with other Asian currencies and the country's economic fundamentals.

Source:Xinhua 
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