JAKARTA: Indonesia's central bank raised its benchmark interest rate by 25 basis points to 6.75 percent on Friday, days after data showed inflation was higher than forecast, an official said.Bank Indonesia deputy governor Halim Alamsyah said the central bank decided to increase its benchmark rate from 6.50 percent on concerns that rising food prices could stoke inflation further.
"Yes, it's raised by 25 basis points," Alamsyah told reporters as quoted by Dow Jones Newswire. It is the first increase since August 2009.The consumer price index rose 7.02 percent year-on-year in January, more than the market expectation of 6.81 percent.Extreme weather has disrupted harvests and food distribution, pushing last year's annual inflation close to seven percent, above the official target of 4.0-6.0 percent.
Prices of chillies, a staple in Indonesia, increased five-fold to around 100,000 rupiahs ($11) a kilogram (2.2 pounds) late last year.The government last month suspended import duties on wheat, soybeans, fertiliser and other food-related items for the rest of the year.
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