Jakarta: Bank Indonesia (BI) is optimistic that the annual consumer price index (CPI) will remain low at the end of 2019.
"BI believes this year's inflation will remain below 3.5 percent. BI predicts that it will reach around 2.7 percent," BI Governor Perry Warjiyo said here on Tuesday.
Central Statistics Agency (BPS) head Suhariyanto recently announced inflation reached 0.11 percent month-to-month (mtm) and 2.48 percent year-on-year (yoy) in March 2019. The official explained that last month's inflation was mainly influenced by rising air fares.
Administered prices (AP) inflation was recorded at 0.08 percent (mtm) in March 2019, up slightly from 0.06 percent (mtm) the month earlier. Annually, administered prices recorded 3.25 percent (yoy) inflation in the reporting period, falling from 3.38 percent (yoy) in the previous period.
Core inflation slowed from 0.26 percent (mtm) in February 2019 to 0.06 percent (mtm) in March 2019. Annually, core inflation stood at 3.03 percent (yoy), down slightly from 3.06 percent (yoy) the month earlier.
Volatile foods (VF) recorded 0.02 percent (mtm) deflation in the reporting period, reversing the 1.3 percent (mtm) inflation posted the month earlier. Annually, VF inflation stood at 0.16 percent (yoy), down from 0.33 percent (yoy) the month earlier.
BI decided to maintain its 7-Day Reverse Repo Rate at 6.00 percent last month. BI also maintained the Deposit Facility and Lending Facility rates at 5.25 percent and 6.75 percent respectively.
The decision is consistent with ongoing efforts to strengthen the external stability of the economy, reduce the current account deficit to a manageable threshold in particular, while maintaining the attractiveness of domestic financial assets.
The central bank is committed to strengthen coordination with the government and other relevant authorities in order to maintain economic stability, particularly in terms of controlling inflation and current account deficit, while sustaining future economic growth momentum by catalysing domestic demand and maintaining external stability to stimulate exports, tourism and foreign capital investment.