VP CALLS FOR CLOSE MONITORING OF INFLATION

Jakarta, June 11 (ANTARA) - Vice President Boediono has asked for continued monitoring of the inflation rate in 2010 due to the financial crisis in Europe and ahead of the Muslim fasting month.

"The rate of inflation must be closely watched moreover now following a financial crisis in Europe and ahead of the fasting month," his spokesman, Yopie Hidayat, said quoting him to newsmen here on Friday.

He made the statement after attending a meeting on macro-economy led by the vice president.

Yopie said the vice president specifically emphasized the importance for the government to watch inflation because based on experience so far monetary and real factors could contribute fifty-fifty to inflation in the country.

This means that the inflation issue could not be fully referred to Bank Indonesia to be dealt with through a monetary policy because it is also closely linked with real sector such as flows of goods and government policies in production and raw materials procurement.

The two-hour meeting was attended by Finance Minister Agus Martowardojo, Trade Minister Mari Elka Pangestu, Industry Minister MS Hidayat, Head of Capital Investment Coordinating Board Gita Wirjawan, acting governor of Bank Indonesia Darmin Nasution and head of the Central Bureau of Statistics, Rusman Heriawan.

Yopie said during the meeting they had also discussed the price of rice which also had to be closely watched, adding a team had been set up to monitor the price of basic necessaries led by the chief economic minister.

"A center command has been in place at the ministry of trade to monitor closely the movement of the prices of basic necessaries," he said.

Besides the upcoming fasting month there will also be seasonal factors in August that also need to be closely monitored, he said.

According to the National Bureau of Statistics, the rate of inflation was recorded at 0.29 percent in May while the rate of inflation for January-May period was recorded at 1.44 percent.