Indonesia c.bank: inflation at 3.5 pct by year-end

JAKARTA, Nov 24 - Indonesia's annual inflation rate is likely to be 3.5 percent at the end of year, the central bank senior deputy governor said on Tuesday, in line with its earlier forecast amid a stable food supply and a steady rupiah <IDR=>.

The central bank has said it expected subdued inflation, hovering at around 9-year lows in October, to allow it to keep its interest rates at a record low of 6.5 percent until the end of the year. It is due to meet on Thursday next week to review its policy rate.

"Our inflation rate is low, including this month," Senior Deputy Governor Darmin Nasution told reporters. "Inflation could hit 3.5 percent in 2009." He did not elaborate.

The central bank has previously said inflation could hit the lower end of its 3.5-5.5 percent forecast range for this year. Annual inflation was 2.57 percent in October.

Analysts, however, said price pressure was likely to build up next year amid the government's plans to raise some administered prices including electricity. (Reporting by Adriana Nina Kusuma and Andreas Ismar; Writing by Sonya Angraini; Editing by Jan Dahinten) ((ga.arka@thomsonreuters.com; Reuters Messaging: ga.arka.reuters.com@reuters.net; +62 21 384 6364 ext 911)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))