INSTANT VIEW 2-Indonesia October CPI up 11.77 pct

JAKARTA, Nov 3 (Reuters) - Indonesia's consumer price index (CPI) in October rose 11.77 percent from a year earlier, the Statistics Bureau said on Monday, slightly below expectations, but analysts polled beforehand do not expect a cut in rates this week.

Analysts polled by Reuters had forecast annual inflation of 11.8 percent in October, following September's inflation rate of 12.14 percent.

Month-on-month inflation was 0.45 percent in October against a market forecast of 0.4 percent, and a reported figure of 0.97 percent in the previous month. The monthly figure, however, is not seasonally adjusted.

The Indonesian rupiah currency fell sharply last month, as investors bailed out of Indonesian assets in response to the global financial market turmoil.

The majority of analysts polled had predicted that the central bank would keep its benchmark rate unchanged at this week's monetary policy meeting, in order to defend the rupiah.

COMMENTARY

- ENRICO TANUWIDJAJA, ECONOMIST, OCBC BANK, SINGAPORE

"Falling crude oil prices should translate into milder inflationary pressures going forward but still-elevated global prices are likely to give adequate support for a double-digit inflation trend in Indonesia."

"A noteworthy point is that the Indonesian monetary authority seems to have moved their lever of focus from inflation to growth in the medium-term."

- JOANNA TAN, ECONOMIST, FORECAST PTE LTD, SINGAPORE

"It is not surprising to see inflation pulling back given the seasonal festive spending has ebbed and that global commodity prices have fallen significantly. However, it is worth noting that domestic fuel prices have not been cut since the 28.7 percent fuel hike in May."

"On monetary policy, the pullback in inflation could pave the way for a shift to an easing stance in the coming monetary meet where we are looking at a 25 bps cut."

- WINANG BUDOYO, ECONOMIST, LIPPOBANK

"If the BI rate is increased, the interest rate differential will widen, which usually will prompt investors to come here seeking higher yields but it is different now because investors are having a liquidity crunch."

"So if they hike rates now, the impact will be negative because they will raise rates even though the other central banks have cut their rates. Market may suspect BI is not confident that inflation is under control."

MARKET REACTION: - The rupiah strengthened to 10,750 per dollar at 0639 GMT after the data announcement.

- The Indonesia Composite Index <.JKSE> was largely unchanged at 8.28 percent after the announcement.

LINKS:

- For more data, Indonesia's statistics bureau Web site is: http://www.bps.go.id.

- For a breakdown of consumer price inflation, please click on

BACKGROUND:

- A median forecast in a Reuters poll of 11 analysts was for annual inflation in October to slow to 11.8 percent compared with a two-year high of 12.14 percent in September.

- Analysts expected the central bank to keep its key rates unchanged at 9.50 percent at its meeting on Nov. 6 in a bid to support the rupiah.

- Indonesia's central bank raised its key interest rate by 25 basis points to 9.5 percent in October, the sixth rate increase this year. (Additional reporting by Tyagita Silka and Andreas Ismar)