Bank Indonesia is expected to stay on hold at its monetary policy meeting scheduled to be held this month, owing to the recent easing in the IDR, according to the latest report from ANZ Research.
After hitting a two-year low in September, Indonesia’s headline CPI inflation edged higher to 3.16 percent y/y in October. The headline figure also recorded a sequential rise of 0.28 percent m/m. Higher housing costs, as well as a rebound in food and transport prices, were the main drivers of the increase. Core inflation also picked up, though at 2.94 percent y/y it is unlikely to pose a major concern to Bank Indonesia (BI).
Despite the hikes to non-subsidized fuel prices last month, inflation is still being suppressed in Indonesia as the prices of the more widely-used fuel products (such as Premium and Pertalite) were kept unchanged.
"We estimate that a complete benchmarking of domestic prices to global prices will increase headline CPI by 1.7 percent," the report added.


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