Indonesia inflation rises to 8.79%

Indonesia consumer prices increased 8.79 percent in August on year after a 8.61 percent rise in July, boosting challenges to the authorities to guard rupiah as trade deficit gap widens, the national statistic bureau announced here on Monday. Head of the bureau Suryamin told a press conference that high importation of fuel and food prices had contributed to the price hikes. The central bank increased its benchmark interest rate by 50 basis points to 7 percent at its irregular meeting on Aug. 29 to help ease weakening rupiah against U.S. dollar as the expected tapering of U.S. quantitative easing policy has pulled out funds from emerging market, including Indonesia. Indonesia's trade deficit widened to 2.31 billion U.S. dollars in August from 846.6 million U.S. dollars in June, said Suryamin. Rupiah fell to 10,922 against one U.S. dollar on Monday, the lowest level in 4 years, from about 9,000 before the global economic slowdown, according to the central bank website.