Inflationary expectations up in Indonesia

One factor is the upcoming increase in electricity tariffs.

OCBC Treasury Research noted:

We expect the BI to keep its policy rate steady at 5.75% this week, although it will be interesting to see if the central bank would really move on the overnight FASBI rate (our current view is that the floor of the FASBI rate is likely to remain steady at 4.0% for now), especially on the back of the relatively hawkish tone that we have observed from the central bank in recent weeks.

Note that for 2013, we look for inflationary pressures to be biased towards the upside, with the upcoming increase in electricity tariffs and the possibility of fuel price hike likely to buoy up inflationary expectations for the year.