Bank Indonesia braced for rising prices

Analysts should not doubt the central bank's inflation-fighting credentials, says Budi Mulya, a deputy governor at Bank Indonesia.

Indonesian inflation hit 10.4% in the year to May and is set to soar further in June as cutbacks in oil subsidies mean fuel costs will surge by 50%.

Though Bank Indonesia has raised rates twice since the start of the year, analysts have questioned the central bank's commitment to ensuring current inflation does not feed through to medium-term expectations.

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