Indonesia's inflation rate picks up to 3.45% in June

[JAKARTA] Indonesia's annual inflation rate accelerated slightly more than expected in June as price pressures intensified close to the end of the Muslim fasting month.

The statistics bureau said the June annual rate was 3.45 per cent, compared with May's 3.33 per cent and the median forecast in a Reuters poll of 3.38 per cent.

Core inflation rate, which strips out administered and volatile food prices, was an annualised 3.49 per cent in June, near the 3.50 per cent analysts had expected.

On a monthly basis, the consumer price index (CPI) rose 0.66 per cent.

Despite the acceleration, June's rate is still inside Bank Indonesia (BI) target range of 3-5 per cent. Before Friday's data, the central bank said the rate may be below 4 per cent at the end of the year, creating room for the central bank to ease monetary policy again.

BI's current benchmark rate, cut four times this year by a total of 1 percentage point, is 6.50 per cent. It will adopt a new benchmark in August.

REUTERS