Indonesia's food inflation is expected to continue to rise in the coming months, driven mainly by supply-side pressures including adverse weather and elevated fertilizer costs, RHB economist Wong Xian Yong says in a note. Imported inflation remains an upside risk as a weaker rupiah raises the cost of imported goods, though pass-through is expected to be gradual, he says. Bank Indonesia might keep its benchmark rate unchanged in July as it assesses the impact of earlier tightening, but the central bank could remain ready to raise rates by 25 bps in 3Q if rupiah weakness intensifies, particularly if the dollar approach 18,000 rupiah, he adds. (yingxian.wong@wsj.com)
Dow Jones Newswires
Indonesia Food Inflation Could Remain High — Market Talk
- Sources
- Dow Jones Newswires
- Markets
- Economy, Forex
- Language
- English
Indonesia's food inflation is expected to continue to rise in the coming months, driven mainly by supply-side pressures including adverse weather and elevated fertilizer costs, RHB economist Wong Xian Yong says in a note. Imported inflation remains an upside risk as a weaker rupiah raises the cost…