REPUBLIKA.CO.ID, BATAM  --  Bank Indonesia (BI) Governor Agus Martowardojo said Indonesia's inflation rate will stay at 3.2 percent throughout 2016 compared to 3.35 percent in the previous year.

Martowardojo added the low inflation rate this year will maintain economic stability and reflect good economic fundamentals after the inflation rate climbed to 8.3 percent last year.

"In 2013, (the inflation rate) reduced much of the income. In 2015, the inflation rate was getting better. We predict the inflation will stay at 3.2 percent in 2016," he said to regional heads at a forum in Batam on Friday.

The inflation rate forecast of 3.2 percent for this year is the lower limit of the central bank's inflation rate target of 4, plus and minus 1 percent. "We hope that during the remainder of 2016, the inflation rate can be kept in check and remained stable," Martowardojo added.

However, Martowardojo did not divulge the supporting factors that would keep the inflation rate at a low level of 3.2 percent. Pressure on the inflation rate will mostly come from food inflation, while the inflation from administered prices can be controlled, the BI governor said earlier.

The pressure on the inflation rate in the remainder of 2016 is expected to originate from the impact of the wet dry season, holidays, and Christmas and New Year celebrations.

Inflation is one of the macroeconomic indicators kept by the central bank to maintain economic stability. It is also a reference for BI to determine the direction of the monetary policy.

The other indicator is the current account which will stay within a safe span of US$20 billion or 2.2 percent of the national gross domestic product, according to the BI governor. The central bank has predicted the national economy will grow 5 to 5.4 percent this year.

Ikuti Whatsapp Channel Republika