BI optimistic inflation to return to normal in September

BI optimistic inflation to return to normal in September

Halim Alamsyah (ANTARA)

We will closely see what policy will be taken."
Jakarta (ANTARA News) - Bank Indonesia (the Indonesian central bank/BI) deputy governor Halim Alamsyah said he was optimistic inflation would be normal in September.

"Based on data, simulation and prediction, at the latest, the inflation hike, especially because of recent fuel price hike, would be back to normal or even be lower in September," he said when launching a shariah economy movement program here on Friday.

Halim said that capital has already started to enter into the country again. "Capital inflow has begun again through state bonds and the capital market would fluctuate again," he added.

"The fuel price hike has indeed triggered inflation but it is still under control with our economy still continuing to grow around six percent," he said.

He said it was not impossible for the national economy to improve due to compensations that the government have provided ahead of the 2014 general elections.

He said exports had also started to be relatively good although they were weak.

He said the weak exports occurred due to the drop in commodity prices although in terms of volume exports of prime commodities rose.

"We will closely see what policy will be taken," he said.

Regarding the central bank`s strategy to restore inflation Halim said BI has taken various measures.

"We have started intervening in the market, conducted market operations including in the rupiah market and stabilized state bonds. All of BI`s policies so far have already been good," he said.

Based on the National Statistics Agency data, the rate of inflation in June was recorded at 1.03 percent while inflation in the January to June reached 3.35 percent while year on year inflation at 5.9 percent. General inflation components contributed 1.03 percents while core inflation 0.32 percent.

(Reporting by Juwita Trisna Rahayu/H-YH)