JAKARTA- INDONESIA'S central bank faced fresh pressure to raise interest rates on Monday after data showed inflation for 2010 reached almost seven per cent due to rising food prices.
However, analysts said the bank will likely increase lending costs in the next few months as it keeps tabs on the core inflation rate, which excludes the volatile cost of food.
And the country's finance minister said the country's economy was in a much better state than previously forecast.
The Central Statistics Agency said on Monday that inflation for 2010 came in at 6.96 per cent, well up from the year earlier figure of 2.78 per cent, although the core rate eased slightly to 4.28 per cent.
'Bank Indonesia's target for core inflation is under five percent. It may raise interest rates if core inflation rises above five percent,' Syailendra Capital investment analyst Lanang Trihardian told reporters.
Indonesia's last interest-rate move was a cut to 6.50 per cent in August last year as the economy powered through the global financial crisis on the back of strong domestic demand and commodities exports.
-- AFP