Indonesia has announced that India’s inflation rate reached its highest level in 5 years in June. It was above the Bank of Indonesia’s (BI) inflation target due to rising food prices.
Inflation reached 4.35% in June, the highest level since June 2017. In May, inflation was 3.55%, while the BI’s inflation target is 2-4%.
However, core inflation (excluding government-controlled and volatile goods) was 2.63% in June, compared with 2.58% in May.
The BI also raised the reserve requirement ratio for banks as part of its stimulus package under COVID-19, but has not yet raised interest rates due to relatively low inflation.
According to Indonesia’s Bureau of Statistics, rising global prices for wheat, sugar and soybeans have so far had little impact on domestic inflation. At the same time, although wheat flour and noodle producers have said that costs are rising, consumers are not being affected.