Dec Indonesian inflation lowest in 6 yrs; widens room for rate cut

Jakarta

INDONESIA'S annual inflation rate cooled to the lowest in six years in December, which might pave the way for the central bank to cut a benchmark rate held at 7.50 per cent since February 2015. High inflation has been one of the issues keeping Bank Indonesia (BI) from cutting its policy rates. Annual inflation topped 8 per cent in December 2014, after a fuel price hike, and stayed above 6 per cent most of 2015.

The rate cooled to 3.35 per cent in December, Indonesia's statistics bureau said on Monday, from 4.89 per cent in November. But it was higher than analysts' forecast of 3.00 per cent in a Reuters poll.