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Ipad Prices Jumping 12% On Rupiah Show Inflation Pressure

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http://www.bloomberg.com/news/2013-10-02/ipad-prices-jumping-12-on-rupiah-show-indonesia-inflation-risk.html

The rupiah’s slump is fueling a surge in Indonesia’s costs of imported goods from iPads to soybeans, spurring Southeast Asia’s fastest inflation and increasing growth risks ahead of elections next year.

The cost of iPads jumped 12 percent last month, according to a price list at Indonesia’s leading Apple Inc. (AAPL) retailer iBox. Tofu makers in the world’s fourth-most populous nation went on strike in September as imported soybeans climbed 12 percent this year, according to data from the trade ministry.

“It has raised the cost of production, so we can’t avoid raising prices,” said Adhi Siswaja Lukman, chairman of the industry lobby group Indonesian Food and Beverage Association. The group is cutting its sales-growth target for this year to 5 percent from 8 percent previously, he said.

The currency’s 14 percent decline in the last three months adds escalating import costs to increased fuel tariffs and interest rates, triggering higher retail prices for consumers. An inflation rate more than three times the pace at the last vote highlights the challenge for President Susilo Bambang Yudhoyono’s coalition government in a nation where riots spurred by soaring prices helped oust dictator Suharto in 1998.

You mean currency debasement isn't leading to price stability nirvana? Clearly they aren't an advanced economy.....

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Gold price in Rupiah's

gold_5_year_o_idr.png

2014 – Redenomination

Indonesia's Central Bank has announced that the rupiah would be redenominated by removing three zeros starting 2014. The existing rupiah will be phased out by the end of 2016. During the transition period, the old and new currency notes will stay valid.[17]

The plans are delayed recently (Aug 2013) because of other monetary problems gainig higher priority like inflation and foreign divestment.[18]

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