Indonesia's annual inflation in November accelerates at slower pace as prices of foods and other basic needs decrease, giving the central bank opportunity to keep its benchmark interest rate on hold, the Statistic Bureau and analyst said here on Thursday.
Deputy for Distribution and Services of the Statistic Bureau named only Djamal announced that the inflation in November reached 4.15 percent year on year after accelerating slower at 4.42 percent in October year on year.
The central bank unexpectedly cut the interest rate by 50 basis points in October to 6.00 percent following its decision to reduce the rate by 25 basis points in September after refraining from cutting it for more than two years, as an effort to shield the country's economy from the risks of the global economic slowdown.
Analyst from CIMB Niaga bank Winang Budoyo said that the good inflation outlook could lead the central bank to keep the interest rate on hold on its meeting on Dec. 8.
The central bank would keep implementing loose monetary policy next year, though the OECD (Organization for Economic Cooperation and Development) recommended the bank this week to impose a tight monetary policy as they forecast the gloomy global economy would hit Indonesia's exports and soaring global oil price would raise inflation pressure on Indonesia, Perry Warjio, director at the directorate research and monetary policy at the bank said on Tuesday.
On month, inflation in November rose to 0.34 percent after reaching 0.12 percent as some food prices and gold prices had started to rise before the Christmas and New year holidays, Djamal said.
The bureau has predicted the inflation will end at below 4.5 percent at this year end, head of the Bureau Rusman Heriawan said last month. For the next year, the inflation was forecast at 3.5 percent to 5.5 percent, the central bank has said.