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Indonesia annual inflation eases to 3.6 pct in April

Xinhua, May 2, 2016 Adjust font size:

Indonesia's inflation accelerated at slower pace in April to 3.6 percent on yearly basis from 4.45 percent in March, allowing the central bank to continue to hold its benchmark interest rate this month, statistic bureau and analyst said here on Monday.

Head of the National Statistic Bureau Suryamin said that deflation on food prices, 0.94 percent in April, contributed the highest to the slowing inflation.

On month, consumer price index reached minus 0.45 percent in April, falling from 0.19 percent in March, he revealed.

"Among the highest contributive factors to the deflation include the reduction of prices of subsidized-fuel prices, red chili, rice and fish and others," Mr. Suryamin told a press conference at the bureau headquarters.

The government cut subsidized fuel price at the beginning of April as global oil prices drop significantly.

Core inflation, excluding volatile components and prices determined by the government, eased by 3.41 percent in April on year, compared with percent 3.50 percent in March, Suryamin said.

Economic Analyst from Bank Danamon Wisnu Wardana said that with the annual inflation in April was below the expectation of analysts from the lender which is 3.77 to 3.88 percent.

"The possibility is that the central bank will hold its basic rate. Besides, the country will enter fasting month next month," he told Xinhua by phone after the announcement.

Demand for foods and clothing commonly rises during the month in Indonesia, which has the wourld's largest Muslim population.

In addition, unfavorable U.S. economic data may lead the U.S. Fed Reserve to refrain from raising its rate, said Wardana.

The central bank, which has adopted the reverse repo rate as a new policy for its benchmark interest rate beginning August this year, targets 2016 inflation to stay between 3-5 percent.

The current benchmark rate, which was slashed by 75 points in the first three months this year, is at 6.75 percent, while the seven-day repo rate is at 5.5 percent. Endit