Inflation and possibility of better credit rating
Yesterday, Indonesia Central Statistic Agency (BPS) just announced the inflation rate for November have reached 0.60 (month-on-month). This figure will give total contribution for jan-nov 2010 (year to date) inflation to 5.98 percent.
It bring some caution to central bank inflation target that supposed to be within 4 – 6 percent this year. Based on Bahana Securities review explain that this particular increase was drive from the supply side which means an increase of commodity prices such as rice, chilies, onion and cooking oil.
This bring to the point where central bank action to review on their monetary policies to consider raising the interest key rate, which will bring more money to the bank.
Despite to the inflation issues, on the other hand, Moody’s rating agencies is considering to put review on Indonesia credit rating which now on Ba2 grade on Indonesia’s local- and foreign- currency debt. This consideration are taken due to better sustainability and fundamental economic condition of Indonesia.
However, government need to remain alert of what our nation needed most which is more concrete plan and action to improve our infrastructure. This action will bring domino effect for our business environment, loose the high economy cost that will bring to more higher inflation rate.
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