RI may see low inflation in May

RI may see low inflation in May

MANILA (Dow Jones): Indonesia experienced large "negative inflation" in April and will likely see low inflation again in May, Bank Indonesia governor Sjahril Sabirin said Friday.

Speaking on the margins of the annual meeting of the Asian Development Bank, Sjahril also said he was "satisfied" with the current level of the rupiah and interest rates.

Indonesian consumer prices already slipped into deflation in March of 0.18 percent compared with a month earlier, while annual inflation was 45.4 percent.

"(April) was another negative," Sjahril said. "Next month (May), I am confident it will be low...(but) I'm not sure it will be negative, too."

Indonesia has made controlling inflation a major focus of its economic policy, particularly after consumer prices soared during much of last year.

Lower inflation has allowed the central bank to guide interest rates lower, while at the same time not damaging the rupiah.

Late Friday, the rupiah was traded at Rp 8,215 to the dollar, down from Rp 8,383 late Thursday and from Rp 8,550 late Wednesday in Asia.

Indonesian one-month interest rates are at around 33.21 percent now, down from lofty levels of around 70 percent in September and from close to 40 percent a couple of months ago.