Indonesia central bank reiterates room for accommodative policy as inflation seen low

FILE PHOTO: Bank Indonesia's Governor Perry Warjiyo speaks during a news conference at the Bank Indonesia headquarters in Jakarta, Indonesia, January 17, 2019. REUTERS/Willy Kurniawan/File Photo

JAKARTA (Reuters) - Indonesia’s central bank, which cut its benchmark interest rate for the first time in nearly two years earlier this month, has room for a more accommodative monetary policy as inflation remains low, Governor Perry Warjiyo said on Friday.

The annual inflation rate in July was seen at 3.23%, down a touch from 3.28% in June, he said, adding that rising chili prices partially offset a fall in transportation tariffs, including air fares. Bank Indonesia targeted inflation at 2.5%-4.5% for 2019.

“As inflation remains low, there remains room for more accommodative monetary policy,” the governor told reporters.

Reporting by Maikel Jefriando; Writing by Gayatri Suroyo; Editing by Simon Cameron-Moore