In September, Indonesia's inflation rate went to its highest level since October 2015, according to Statistics Indonesia data released this week.
The annual inflation rate went to 5.95 percent in September, up from 4.69 percent in August.
In September, the annual core inflation rate, which excludes government-controlled prices and volatile food prices, accelerated to 3.21 percent, compared with 3.04 percent in August and analysts' forecasts of 3.60 percent.
Instability in September was mostly affected by the rise in fuel prices and inflation in the transportation sector, according to Margo Yuwono, head of Statistics Indonesia.
Inflation could increase further in October as several regions have yet to increase their transportation fares.
In early September, Indonesia raised fuel prices by 30 percent as part of the government's efforts to reduce spending on subsidies.
In September, Bank Indonesia BI increased policy interest rates by 50 basis points to control inflation, which is expected to peak at just over 6 percent, compared to its target range of 2 to 4 percent.
Bank Danamon has revised its inflation outlook to 6.5 percent at the end of 2022, up from 4.5 percent, said Irman Faiz, an economist at the bank.
He added that BI still has 100 bps of space to hike the policy rate from the current level this year, as monetary policymakers have vowed to tame inflation down to their target range by the year 2023, as quoted by Reuters.