Indonesia's Feb inflation rises, rates seen on hold

The rupiah was little changed at 9,115 per dollar at 0830 GMT after the data, while the stock market's Indonesia Composite Index .JKSE was down 2.7 percent on the day, compared with a fall of 2.2 percent before the figures were released.

The rupiah has strengthened about 3 percent this year against a broadly weak U.S. dollar.

RATES ON HOLD

Most economists expect the central bank to keep its benchmark rate at 8.0 percent when it holds its monetary policy meeting on Thursday, despite the rupiah's strength and expected rate cuts by the U.S. Federal Reserve.

"BI (Bank Indonesia) is not seen having room to pull off rate cuts later this week, simply because inflation has not been tamed convincingly and the central bank cannot afford to undermine the rupiah at this juncture," said Vishnu Varathan, an economist at Forecast Pte Ltd in Singapore.

The central bank kept the BI rate steady at 8.0 percent in February because of high inflation. The rate has fallen from a peak 12.75 percent in late 2005.

The statistics bureau also reported that Indonesian exports rose 33.2 percent in January from a year earlier after a 13 percent rise in December. The rise was well above the 19.9 percent forecast in a Reuters poll.

Imports grew 43.9 percent in January, higher than the 30.0 percent forecast in the poll. It compared with a rise of 36.8 percent in December.

The trade surplus was $3.48 billion, higher than a forecast of $3.2 billion.