Indonesia’s headline inflation eases to 1.55% in Nov

By Stefanno Sulaiman and Fransiska Nangoy

JAKARTA (Reuters) -Indonesia’s annual inflation eased to 1.55% in November, official data showed on Monday, for the slowest rate since July 2021 amid lower prices of some food items.

November’s reading eased from 1.71% in October and was slightly above a forecast of 1.50% by analysts polled by Reuters. The headline inflation is near the lower end of Bank Indonesia’s target range of 1.5% to 3.5%.

Among the biggest contributors to the cooling headline inflation were lower prices of chili peppers and some types of fuel, the acting head of Statistics Indonesia, Amalia Widyasanti, told reporters.

The low inflation may give scope for Indonesia’s central bank to cut its policy rates as the U.S. Federal Reserve is widely expected to lower rates this month, economists said.

However, Bank Indonesia (BI) governor Perry Warjiyo said on Friday the bank’s short-term policy focus was on keeping the rupiah stable as global uncertainties remain high following Donald Trump’s U.S. election victory.

“Bank Indonesia is likely to remain cautious, as its focus is on stabilising currency movements,” said Danamon economist Hosianna Situmorang.

“However, there is room for a rate cut in December, in line with expectations of a 25-bps reduction during the Federal Reserve’s FOMC meeting on December 17-18.”

Core inflation, which excludes government-controlled prices and volatile food prices, picked up slightly to 2.26% annually in November, the highest since July 2023. That compares to 2.21% in October and 2.20% in the analysts’ forecast.