BPS Sends Code To Bank Indonesia To Hoist Interest Rates: Core Inflation Has Rise!

BPS Office (Photo: Doc. Antara)

JAKARTA – The Central Statistics Agency (BPS) confirmed that the core inflation rate has entered an increasing trend in 2022. This was revealed by the Head of BPS Margo Yuwono to the media crew earlier this week.

According to him, there has been an increase in core inflation in April 2022 to 2.60 percent on an annual basis (year on year / yoy). This amount is the highest level since June 2020.

"Yo-y-y core inflation in April 2022 was 2.60 percent. This is the highest since June 2020 even though the figure is still below the conditions before the 2019 pandemic," he said via an online channel quoted Tuesday, May 10.

Margo added that if we look at it on a monthly basis (month to month/mtm), core inflation also tends to be in an increasing condition.

"If we look at April 2022, the core component experienced inflation of 0.36 percent month to month. Although this figure is still lower than January 2022 which was 0.42 percent, it shows an improving trend," he said.

Meanwhile, in general, Margo explained that the inflation level in April was recorded at 3.47 percent yoy. The books were higher than the previous two months by 2.64 percent in March, and 2.03 percent in February, respectively.

To note, core inflation is one of the main considerations of Bank Indonesia (BI) in setting the benchmark interest rate.

In a VOI note, BI Governor Perry Warjiyo briefly mentioned the central bank's intention to renew the BI rate if there is a movement in domestic inflation.

“We will continue to pay attention to inflation developments, especially core inflation. If the core inflation goes up, the interest rate will adjust," he said Friday, December 24, 2021.

For information, the monetary authority currently sets a BI rate policy of 3.50 percent. This level is the lowest in BI history and after being cut six times since 2020 by 150 bps.