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Indonesia inflation expectations coming down near central bank's forecast - gov

Published 12/01/2022, 11:22 PM
Updated 12/01/2022, 11:25 PM
© Reuters. FILE PHOTO: Indonesia's Central Bank Governor Perry Warjiyo speaks during a news conference, at the G20 Finance Ministers Meeting in Nusa Dua, Bali, Indonesia, July 16, 2022. Made Nagi/Pool via REUTERS/File Photo

(Reuters) - Indonesia's central bank governor Perry Warjiyo said on Friday inflation expectations were coming down rapidly after Bank Indonesia (BI) started hiking interest rates aggressively four months ago.

He told a central banking forum in Bangkok that the consensus forecast for Indonesia's inflation was at 6.9% four months ago, but now is approaching 5.5%, BI's own forecast.

"After we aggressively responded through interest rates, the gap between consensus forecast and our forecast is narrowing," he said, reiterating the need for "front-loaded, pre-emptive and forward-looking" interest rate policy.

BI has hiked the benchmark interest rate by 175 basis points in the past four months.

© Reuters. FILE PHOTO: Indonesia's Central Bank Governor Perry Warjiyo speaks during a news conference, at the G20 Finance Ministers Meeting in Nusa Dua, Bali, Indonesia, July 16, 2022. Made Nagi/Pool via REUTERS/File Photo

Warjiyo reiterated BI's goal to lower core inflation back to its target range of 2%-4% in the first half of 2023 and lower the headline inflation to within target by the second half next year.

Indonesia's annual headline inflation in November eased to 5.42% from 5.71% in October.

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