JAKARTA, Aug 10 (Reuters) - Regional governments in Indonesia should shore up food supplies and ensure that food inflation does not exceed 6% so as to maintain people's purchasing power, the central bank governor said on Wednesday.
Indonesia's headline inflation stood at 4.94% in July, the highest since October 2015, but the inflation rate for volatile food items was at 11.47% year-on-year.
Bank Indonesia (BI) governor Perry Warjiyo called for more cooperation between local governments to ensure food supply security and to conduct market operations to control prices of products like rice, eggs, shallots and chilli.
"(Food inflation) is not only an economic problem but also a social issue...we cannot let people's purchasing power weaken," he said in a meeting with regional authorities.
The central bank has targeted headline inflation of 2% to 4% this year, but after its July meeting, Perry said the inflation could reach 4.5% to 4.6% by the end of 2022.
Earlier this month, he expected food supply to improve by the end of the year, which could help ease some of the inflationary pressures.
The rising inflation and better-than-expected GDP reading for the second quarter has prompted calls from economists for BI to hike its policy rate, which it has kept at a record low of 3.50% since February 2021.
(Reporting by Stefanno Sulaiman and Ananda Teresia; Editing by Kanupriya Kapoor, Fransiska Nangoy)
