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Indonesia March inflation slows to below central bank target

[JAKARTA] Indonesia's annual inflation rate slowed a touch more than expected in March to slip below the central bank's target range for the first time in three years, official data showed on Monday.

The Consumer Price Index rose 2.48 per cent on-year in March, the statistics bureau said, the weakest pace of increase since late 2009 and slightly below the median forecast of 2.5 per cent given by a Reuters poll.

Bank Indonesia (BI) targets inflation in a range of 2.5-4.5 per cent this year.

The last time the headline inflation rate was under BI's target range was in August 2016, according to Refinitiv Eikon data.

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The core inflation rate in March was 3.03 per cent, versus 3.06 per cent predicted in the poll.

Hit by capital outflows, BI became one of Asia's most aggressive central banks last year, raising interest rates six times by a total 175 basis points.

Low inflation readings and a sharp about-turn on policy tightening by the US Federal Reserve have prompted a growing number of analysts to argue that BI should unwind last year's hikes later in 2019.

REUTERS