JAKARTA: Bank Indonesia (BI) predicts that March’s inflation rate will hover within a range of 0.3 to 0.4 percent (month-to-month), or higher than the previously expected rate of between 0.27 and 0.3 percent.
BI deputy governor Perry Warjiyo said the impacts of the recent fuel-price increase had contributed to inflationary pressure in March, although only for four days.
“The fuel price just increased by Rp 500 [38 US cents] or 7 to 8 percent So the fuel hike will contribute about 0.04 percent to inflation, but this will take effect in April, right?” he said as quoted by Antara news agency in Jakarta on Monday.
The BI deputy governor further explained that the country’s fuel price increase was influenced by two things, namely the depreciation of the rupiah and fluctuating global oil prices.
“Increases in fuel prices depend on developments in world oil prices [and are] monitored every two weeks,” said Perry.
Deflation in January and February also occurred because of global oil prices, which were still relatively low. Meanwhile, the recent fuel price hike was triggered by turmoil in the Middle East.
Perry said the central bank could not predict how much fuel prices would fluctuate in the near future. However, he said external conditions would heavily influence the prices.
