Inflation eases again in June<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Inflation slowed again in June thanks largely to a stronger
\nrupiah and falling food prices, the Central Bureau of Statistics
\n(BPS) reported on Monday.<\/p>\n
BPS said year-on-year inflation in June was 11.48 percent,
\nlower than the 12.93 percent in May. The annual inflation rate
\nhas been declining since February.<\/p>\n
Monthly inflation for June was also lower at 0.36 percent,
\ncompared to 0.8 percent in May.<\/p>\n
BPS said the stronger rupiah offset fuel price increases. The
\nrupiah continued to make gains against dollar, strengthening by 1
\npercent in June.<\/p>\n
This resulted in a 0.28 percent drop in basic food prices
\nduring the month, a reversal from the 0.6 percent rise in May.<\/p>\n
Since the start of the year, the rupiah has strengthened by
\nalmost 20 percent against the dollar.<\/p>\n
On Monday, the local currency was unchanged from Friday's
\nclose of Rp 8,715 per dollar.<\/p>\n
The figures from June showed that the government is on track
\nto achieve its target of single-digit inflation for the year.<\/p>\n
Analysts have said that a manageable inflation rate would
\nprovide more leeway for Bank Indonesia to continue lowering its
\nbenchmark interest rate.<\/p>\n
This is seen as advantageous because a lower interest rate
\nmeans the government will have to allocate less funds to finance
\ninterest payments on its huge domestic debts.<\/p>\n
No less than Rp 430 trillion (about US$50 billion) worth of
\nrecapitalization bonds are currently held by local banks, with
\nthe government covering the interest payments on these bonds,
\nmost of which move in accordance with the movement of Bank
\nIndonesia's interest rate.<\/p>\n
At the last weekly auction, the benchmark weighted average
\nrate of Bank Indonesia's one-month promissory note dropped
\nslightly to 15.11 percent from 15.14 percent the previous week.<\/p>\n
With the moderate inflation in June, it is expected that the
\ncentral bank will continue to press its one-month rate even
\nlower, bringing it close to 14 percent by the end of the year at
\nthe latest, as was targeted in the state budget.<\/p>\n
In comparison, Bank Indonesia's one-month rate was hovering
\nabove 17 percent at the end of last year.<\/p>\n
Lower interest rates would also allow consumers to obtain bank
\nloans at more affordable rates.<\/p>\n
Elsewhere, BPS said education and recreation costs fell 0.16
\npercent on month in June, and clothing prices edged down 0.24
\npercent.<\/p>\n
However, the price of processed foods, beverages and
\ncigarettes rose 0.01 percent on month, housing costs were up 0.96
\npercent, health care costs gained 0.42 percent and transportation
\nand communications costs rose 2.09 percent.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/inflation-eases-again-in-june-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}