NISP Inflation higher than expectation but still under control, BI signals rate stays at 6.5% until end of 2010

• For the month of April 2010, Indonesian inflation was at 0.15% MoM and 3.91% YoY. Consensus expected figure was 0.07% MoM and 3.72% YoY.

• As the harvest season has ended, the prices of volatile goods jumped by 0.34% MoM in April 2010 compared to a 1.14% deflation in March 2010. Core, administrated and volatile inflation contributed 0.05%, 0.04%, and 0.06% respectively to total MoM inflation of 0.15%.

• BPS predicts that the increase in electricity tariff by 10% could contribute 0.25% to inflation. In addition, the new school year and related expenditures will put inflationary pressures in the month of June-July. However, overall inflation rate is still maintained in line with the government inflation target of 5.3% for 2010F.

• This statement was supported by Acting Bank Indonesia Governor, Mr.Darmin Nasution, who added that the current BI rate of 6.5% is sufficient to maintain the level of targeted inflation of 5.3% until the end of this year.

• Indonesia’s exports in March 2010 reached US$12.63bn or increased by 13.11% MoM compared to February 2010 exports. This was on the back of higher non oil&gas exports by 18.40% MoM to US$10.65bn. When compared to exports, import value grew at a faster rate of 16.32% MoM for to US$11.05bn from February 2010 import of US$9.50bn.