Close Coordination to Control Inflation in Indonesia

Jakarta, Indonesia (News Today) - Bank Indonesia (BI) Deputy Governor Hartadi A Sarwono said the government needs to conduct close coordination to prevent inflation from rising like in July when it reached 1.57 percent. Contacted here on Monday, Hartadi said the high inflation figure in July was caused by an increase in the prices of food due to limited supply and the adminsitered price hikes in the electricity and toll road tariffs.

"The numbers are higher than expected. The food group still dominates in the increase in connection with limited supply due to weather conditions. The upcoming Ramadhan (Islamic fasting month) has also caused high price hike expectations. The administered price hikes in the price of electricity and toll-road fees have also affected inflation this month," he said.

Considering all these inflationary factors, Hartadi said, close coordination would be needed with the governemnt, especially with regard to market operations to meet the public’s need for basic necessaries at affordable prices. Regarding the BI rate, Hartadi said the inflation factor in July would be included in the full review to be carried out by the central bank’s board of governors on Wednesday.

The Central Bureau of Statistics recorded inflation in July at 1.57 percent, saying it was pushed by a hike in the prices of food especially rice and the car license tax (STNK). BPS chief Rusman Heriawan said here on Monday the hike in the price of rice contributed 0.26 percent to the monthly inflation rate and the hike in STNK’s cost 0.21 percent.

Source : kompas

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