Indonesia's inflation slows further in June

Indonesia said Friday that inflation slowed further in June, easing pressure for the central bank to raise interest rates. The statistics agency said the consumer price index reached 5.54 percent, down from May's 5.98 percent.

The rate has slowed consistently over the past few months. May's figures was slightly down from April's 6.16 percent and well off March's 6.65 percent.

"We have a pretty good figure for June. This means the central bank won't have to rush to increase its interest rate," Bank National Indonesia economist Rosady Montol said.

The data comes as the central bank battles to keep prices down while also trying to cap huge inflows of foreign cash from investors seeking higher interest rates than in the West.

Bank Indonesia kept its key rate steady at 6.75 percent last month.

From a month earlier, the inflation rate was up 0.55 percent, compared with a 0.12 percent rise in May. The agency said prices for several food items, such as rice, rose unexpectedly.

Indonesia's annual core inflation, which excludes volatile food prices, reached 4.63 percent In June, slightly lower than 4.64 percent in May.