Indonesia's annual inflation rate rises to 4.42% in February

[JAKARTA] Indonesia's annual inflation rate increased slightly more than expected in February, the statistics bureau said on Tuesday.

February's annual rate was 4.42 per cent, the bureau said, higher than the 4.35 per cent seen in a Reuters poll. The rate is also higher than the 4.14 per cent recorded in January.

The consumer price index fell 0.09 per cent on a monthly basis, compared to an 0.11 per cent drop expected in the poll, as food prices and electricity tariff dipped. But because the pace of price declines was deeper last year, the annual rate edged up.

Core inflation, which strips out volatile food and administered prices and is more affected by Bank Indonesia's policy to manage demand, was exactly the same as January's annual rate of 3.59 per cent.

Bank Indonesia, which has cut its benchmark reference rate twice this year, set a range of 3-5 per cent as its 2016 inflation target. The benchmark rate is 7.00 per cent now.

The central bank's next policy meeting is on March 16-17, right after one of the US Federal Reserve.

REUTERS