BI: Early Rate Hike Not Needed

An Indonesian central bank senior official said Wednesday that an early rate hike will not be needed if inflation continues to ease.

“A positive note is that the month-on-month (inflation) has slowed from 1.57% (in July) to 0.76% (in August)....Hopefully this trend will continue so an early BI rate hike won't be needed,“ Deputy Governor Hartadi Sarwono told Dow Jones Newswires.

The comments came after the Central Statistics Agency released inflation data that also showed annual inflation accelerating to 6.44% in August from 6.22% in July but falling short of market expectations of 6.7%.

Bank Indonesia officials have previously said the central bank is likely to keep its key rate unchanged at 6.5% for the rest of the year if inflation falls within its 4%-6% target for this year.