Indonesia's inflation held at a 16- month high last month amid rising food and energy prices, reducing the room for the central bank to cut interest rates to spur economic growth.
Consumer prices increased 7.4 percent from a year earlier, the Central Statistics Bureau said in Jakarta yesterday. That matched January's gain and the median forecast of economists surveyed by Bloomberg News.
Rising prices of meat, soybeans, energy and clothing may prevent Bank Indonesia, which has reduced borrowing costs by 4.75 percentage points since May 2006, from further cutting its rate. The IMF expects growth in Southeast Asia's largest economy to slow to 6.1 percent this year from 6.3 percent last year.
"In the coming months the inflation rate will likely increase," said Winang Budoyo, an economist at PT Bank Lippo in Jakarta. "Bank Indonesia will want to wait till they see inflation has stabilized before they cut rates further."
Budoyo expects the central bank to reduce its benchmark interest rate in November or December. Bank Indonesia next meets on Thursday to decide on monetary policy.
Indonesia, the world's biggest producer of palm oil, last month said it plans to increase the tax on crude palm oil exports to as much as 25 percent to boost domestic supplies and curb inflation if global prices of the commodity keep increasing.
Palm oil futures in Malaysia, the global benchmark, gained 8.3 percent last week to close above 4,000 ringgit (US$1,254) a tonne for the first time.
Indonesia's wheat flour prices may rise by more than 10 percent in the second quarter to help cover costs that have soared because of higher grain prices, said Ratna Sari Loppies, executive director of the country's wheat-milling association. Indonesia consumed about 3.6 million tonnes of wheat flour last year, she said.
Inflation slowed to 0.65 percent last month from a month ago. Core inflation, that excludes prices of food, accelerated to 7.3 percent from 7.1 percent.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective