BI: Increased Electricity Tariffs to Trigger Inflation

TEMPO Interactive, Jakarta:The Deputy Governor of Bank Indonesia (BI), Hartadi A. Sarwono, said he expects that the increased electricity base tariff wills trigger inflation by a maximum of 0.5 percent.

“The increase is not too high, it is still within the BI inflation target,” he said yesterday.

This year BI target inflations of 4-6 percent. Added to inflation due to increased electricity tariff, Hartadi predicts that yearly inflation reach 5.5 percent.

As is already known, the government and the House of Representatives have agreed to increase the electricity base tariff on July 1 2010.

BI, he said, could hold inflation rate as targeted by guarding monetary policy.

Meanwhile, the Director of Energy & Utilities at Fitch Asia-Pacific, Simon Wong, said he considered that the approved tariff increase was positive for PLN, because it will increase operational margins.



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