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March inflation predicted to stand between 0.3 ' 0.4%
Bank Indonesia (BI) predicts that the inflation rate in March will hover within the range of 0
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ank Indonesia (BI) predicts that the inflation rate in March will hover within the 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 hike had contributed to inflationary pressures in March, although only for four days.
'Fuel contributes around 4 percent to the inflation rate. The fuel cost has just increased by Rp 500 (38 US cents), or around 7 to 8 percent. So the fuel hike will contribute around 0.04 percent to inflation, but this will take effect in April, right?' he said as quoted by Antara in Jakarta on Monday.
The BI deputy governor further explained that the country's fuel cost increases were influenced by two factors, namely the depreciation of the rupiah exchange rate and fluctuating global oil prices.
"Increases in fuel costs will depend on developments of the world's oil prices monitored every two weeks,' said Perry.
The deflation in January and February also occurred because of the global oil price, which was still relatively low. Meanwhile, the current fuel price hike was triggered by turmoil in the Middle East.
Perry said the central bank could not yet predict what the fuel price fluctuation would look like in the near future. However, he said external conditions still would heavily influence the global oil prices.
'It will all depend on what the global oil prices will look like. We still don't know about it yet. The prices could either go down or up. Currently, the world's oil prices are still on the increase because of recent circumstances in the Middle East, so the domestic fuel price has also increased,' said Perry.
However, the BI deputy governor said the current fuel price determination mechanism was better than the previous mechanism as it made smaller impacts on inflation. (ebf)(+++)
