Indonesian inflation picks up in March

JAKARTA, Indonesia – Indonesia’s inflation picked up to 6.38% in March, official data showed Wednesday, April 1, as the price of fuel and rice rose in Southeast Asia’s biggest economy.

The year-on-year increase in prices compared with February’s 6.29%, the statistics agency said.

The cost of petrol rose last month after global oil prices briefly strengthened, mainly due to geopolitical tensions including the Yemen crisis, said agency chief Suryamin.

At the start of this year, Jakarta largely abolished a decades-old regime of heavily subsidizing fuel – which had proven extremely costly – and let prices float with the market.

The immediate impact of the change was a fall in pump prices, due to recent steep drops in global oil costs, which had led to slowing inflation in January and February.

The agency said that inflation was also pushed up in March due to a jump in the price of staple food rice, as distribution problems caused shortages in some areas.

The rupiah rose 0.33% to 13,027 to the dollar in afternoon trade.

Slowing inflation at the start of this year led the central bank, Bank Indonesia, to unexpectedly cut its key interest rate 25 basis points to 7.50% in February.

However, the it held steady last month after the cut put pressure on the rupiah, which at one point fell to a 17-year low against the dollar. – Rappler.com