Bank of Indonesia (BI), the archipelago's central bank, increased the inflation forecast to 14 percent this year because of the oil price hike starting from Oct. 1, Bank Governor Burhanuddin was quoted Tuesday by the Bisnis Indonesia as saying.

The central bank beat the earlier 12 percent inflation estimation.

But the bank still could not determine how much it should increase interest rate.

"If the inflation now (in October) could reach 15 percent, hopefully the inflation in November and December can be lower, so the BI must not raise interest rate," said Burhanuddin.

In term of the inflation rate next year, the governor predicted that it would go down to single digit between six to seven percents, if there is no more oil price hike.

Source: Xinhua