Indonesia's Consumer Inflation Accelerated in September

By Ying Xian Wong

Indonesia's consumer inflation picked up in September due to higher food prices.

The consumer-price index rose 3.28% in September from a year earlier, up from August's 3.19% increase, mainly driven by higher prices in the food, beverage and cigarette category, personal-care and transport costs, the statistics agency said Thursday. Core inflation was 2.84%, compared with 2.92% in August.

Inflation remains within Bank Indonesia's 1.5%-3.5% target range, with administered-price pressures remaining relatively benign, ANZ economist Dhiraj Nim said in a recent note.

September's inflation print isn't expected to materially alter expectations for Bank Indonesia's policy, which remains focused on exchange rate stability, unless inflation rises more sharply than expected or further evidence of food-price pressures feeding into broader underlying inflation emerges, Nim said.

With inflationary pressures still contained, the focus is likely to remain on the rupiah and broader financial conditions.

Bank Indonesia is expected to deliver one more 25-basis-point rate increase in the fourth quarter, bringing the policy rate to 6.00%, with the timing likely driven by rupiah stability and capital flows, RHB economist Wong Xian Yong said in a note.

BI is likely to rely on forex intervention and other policy tools to manage temporary currency pressure before using the policy rate, he said.

The November MSCI review remains a key risk, as an unfavorable outcome could pressure the rupiah and bring forward the rate increase, Wong added.

Write to Ying Xian Wong at yingxian.wong@wsj.com

(END) Dow Jones Newswires

October 01, 2026 00:39 ET (04:39 GMT)