Bank Indonesia (BI) predicts a monthly inflation rate of slightly below 1% January amid two main opposing variables in the consumer price index: higher foods prices and lower fuel prices.

"As of the third week of January, we see inflation at 0.75 percent. As the fuel prices are cut, we see that the [January] inflation will not reach 1 percent," said BI Governor Agus Martowardojo at the State Palace in Jakarta on Thursday.

According to the central bank'€™s latest survey for the second week of January, higher prices have been recorded in staple foods such as chili, chicken and eggs.

However, the reduction in fuel prices at the beginning of this month might counterbalance the effect on January inflation, Agus projected.

"We have heard that the government is coordinating to control inflation. In general, BI remains optimistic that inflation at the end of 2016 will be in accordance with our estimation, at 4 percent plus/minus 1 [percentage point]," he said.

The Central Statistical Agency (BPS) is scheduled to publish January inflation data on February 1. The agency recorded December inflation at 0.96 percent and inflation throughout 2015 at 3.35 percent. (ags)(+)

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