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Indonesia will announce February inflation on 2 March and strategists at Standard Chartered Bank expect a big increase due to higher garlic prices. USD/IDR is sitting at 14379.

Key quotes

“We expect CPI inflation to have increased to 3.1% y/y, from 2.7% y/y in January, on higher food inflation and administered price adjustments.” 

“Garlic prices rose 46% m/m, according to the Trade Ministry’s price monitoring database, followed by red chilli (+7.9%) and onion (+6.2%); rice prices were relatively stable. The jump in garlic prices was due to the rainy season and import supply disruption because of the coronavirus virus outbreak in China. We expect cigarette producers to pass on higher excise taxes to consumers this year.”

“Core inflation was likely steady at 2.9% y/y in February.”