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Indonesia's inflation slows in July

Staff Writer |
Inflation in Indonesia accelerated at slower pace in July after regularly peaking in a month earlier, giving more rooms to the central bank to refrain from applying tight monetary policy amid a hawkish prospect of U.S. Fed Reserve monetary policy.

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The national statistics bureau on Tuesday announced that consumer price index was 3.88 percent in July from a year earlier, compared with 4.37 percent in June.

Indonesia regularly experiences high inflation pressure during fasting month of Ramadhan ended with Islamic festivity at the end of June, during which demand of foods and clothes rises.

On month, inflation eased to 0.22 percent in July from 0.69 in previous month, head of the bureau Kecuk Suhariyanto told a press conference at the bureau's headquarters.

He said that core inflation, abandoning volatile food prices and administered prices, continued to slow to 3.05 percent in July on yearly basis compared with 3.31 percent, indicating weak people's buying power.

The central bank has refrained from raising its benchmark interest rate and kept it steady at 4.75 percent since October of last year as rapid inflows of foreign capitals have eased concern of risks of the U.S. Fed's reserve tight policy.

The lender has forecast inflation will be 4 percent or lower at the end of this year.

Some U.S. economic data have recently given signal for weakening of the hawkish prospect of the upcoming policy to be issued by the U.S. monetary policy maker.

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