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Indonesia expects annual inflation to rise 3.6%

Staff Writer |
Indonesian central bank forecast consumer price index to accelerate at a faster pace by 3.6 percent in July on yearly basis, from 3.49 percent in June.

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The bank projected inflation at 0.74 percent this month, rising from 0.66 percent in the previous month. The increase of some unprocessed food prices contributed to the price's hikes, including onion and red chili.

The inflation by July was estimated at 1.8 percent. The central bank targets 2016 inflation to stay between 3-5 percent.

The central bank aims to support the government's effort to spur GDP growth at 5 2 percent this year, faster than 4.79 last year.

The central bank had aggressively cut its benchmark by 100 basis points to 6.5 percent this year, but it refrained from trimming the basic rate this month on the prospect of a huge influx of assets repatriation as the lender needs to maintain the country's rupiah at its targeted range.

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