Prices accelerated in September due to higher demand in the fasting month and Idul Fitri holiday, according to the Central Statistics Agency (BPS), prompting predictions that the central bank will maintain its benchmark rate.<\/p>\n
Also on Thursday, BPS announced that August\u2019s exports had reached US$10.55 billion, surpassing $10 billion for the first time since October last year, as Indonesia\u2019s major trading partners experienced economic recovery.<\/p>\n
September saw an inflation of 1.05 percent from a month earlier, BPS head Rusman Heriawan said in a press conference Thursday.<\/p>\n
\u201cNearing the Idul Fitri holiday, prices showed an increasing trend.\u201d<\/p>\n
Year-on-year inflation in September rose 2.83 percent from a year earlier. In the first nine months this year, inflation reached 2.28 percent.<\/p>\n
BI senior deputy governor Darmin Nasution said full-year inflation this year will likely be less than 4 percent.<\/p>\n
Eric Sugandi, an economist at Standard Chartered Bank, said inflation was still within a moderate level, and BI would hold its rate at 6.5 percent to help spur growth.<\/p>\n
\u201cMy opinion is that 6.5 percent is already the right level for the BI rate, given that the central bank should now pay more attention to accelerating inflation.<\/p>\n
\u201cWith respect to the interest rate, what economy now needs is accelerating credit expansion by commercial banks.\u201d<\/p>\n
He added another BI rate cut this year would not be effective in bringing lending interest rates down due to several factors, including the high risk premium charged by banks to borrowers; the relatively high cost of funds for the overall banking industry; and the still profitable move by banks in placing their money in government bonds.<\/p>\n
Fourteen major banks have agreed to lower deposit rates to as much as 150 basis points above the BI rate, and further cut the rates to 50 points above the BI rate three months from Aug. 20.<\/p>\n
Eric said bank lending growth would improve in the coming months, although it would be much lower than last year as banks\u2019 concern over the economic slowdown has eased, meaning they can start lowering the risk premium charged to borrowers.<\/p>\n
City analyst Johanna Chua said BI would likely keep its rate at 6.5 percent when the board of governors met Monday, adding that Indonesia would see the first BI rate hike in the second quarter of 2010.<\/p>\n
Eric said BI would raise its rate up to 7.5 percent next year.<\/p>\n
August\u2019s exports rose 8.89 percent from a month earlier, despite continuing to suffer a 15.41 percent decline on a year-to-year basis.<\/p>\n
\u201cExports will likely continue improving in the next four months,\u201d Rusman said.<\/p>\n
The report also shows that Indonesia had a trade surplus of $1.25 billion in August, after importing $9.3 billion in goods and services.<\/p>\n
- JP\/Aditya Suharmoko<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/inflation-accelerates-exports-improve-1254458480", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }