Indonesia's inflation will rise above 5.5 percent in 2012 if the government lifts fuel prices by more than IDR1,000 per liter, Bank Indonesia Governor Darmin Nasution reportedly said Thursday.
The central bank has set an inflation target of 3.5-5.5 percent for 2012. The government plans to raise prices of fuel amid rising oil prices as higher subsidies are dampening state budget.
Early this month, the central bank lowered its key benchmark rate by a quarter point to 5.75 percent to boost economic growth. The bank has reduced a cumulative 100 basis points since October last year.
by RTT Staff Writer
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