Indonesia's inflation rate in January may slow to 3.5 percent compared with 3.79 percent in December, the central bank has said. "The harvest season is coming. Food prices are rising, but just a little, not much,"governor Darmin Nasution was quoted by the Jakarta globe as saying on Saturday.

On month, the inflation would rise by 0.6 percent to 0.7 percent in January from the previous month, Darmin said.

The central bank forecast inflation was going to reach nearly 5. 5 percent this year as the government's plan to restrict the use of subsidized fuel starting from April 1 would contribute 0.94 percent to the inflation pressure, spokesman of the bank Difi A. Djohansyah has said.

The Central Statistics Agency (BPS) will release consumer and trade data on Wednesday.

Easing inflation may not be enough for Bank Indonesia to make any changes in its monetary stance. The central bank, which cut its benchmark rate by 75 basis points between October and November last year, kept the rate at 6 percent in December and January. Low borrowing costs have encouraged many Indonesian consumers to buy goods such as cars and houses.