Indonesia's February inflation rate beat forecasts on surging food prices, government data showed on Friday, but stayed within the central bank's targeted range, reinforcing market views that any rate cuts will come only in the second half of 2024.

The monthly inflation rate accelerated to 2.75%, compared with 2.57% in January, according to the statistics bureau. A median forecast of economists polled by Reuters had expected inflation of 2.60%.

Bank Indonesia (BI) has targeted inflation within a range of 1.5% to 3.5% this year.

In February, BI Governor Perry Warjiyo reiterated the central bank's view that the window to start cutting interest rates is in the second half of 2024, with considerations of inflation and movements in the rupiah's exchange rate.

Indonesia's annual inflation rate has stayed within the central bank's target range since mid-2023, following BI's decision to hike interest rates a total of 250 basis points between August 2022 and October 2023.

"Inflation is picking up, but is still within BI's target range," said Maybank Indonesia economist Myrdal Gunarto. "BI will maintain interest rates until there is easing global risk, especially to inflation."

Gunarto forecast annual inflation could rise to 2.9% in April, coinciding with the Muslim holy month of Ramadan that starts in March and will spill over to April. During Ramadan, food demand and prices usually rise. He forecast inflation to ease to 2.8% by year-end.

Prices of rice, chicken, chili and sugar were among the biggest contributors to February inflation, Statistics Indonesia senior official M. Habibullah told reporters.

According to the national rice price index tracked by the bureau, retail price of rice rose 19.28% annually in February to a record high on anticipation of lower output.

Indonesia expects its rice output in the January-April 2024 harvest period to drop by 17.52%.

The core inflation rate, which strips out government-controlled prices and volatile food prices, was at 1.68% in February, unchanged from the month before and below market's prediction of 1.71%.

Volatile food inflation in February was at 8.47%, or the highest since September 2022, the bureau said.

BI said last week it wants volatile food inflation to be around 5% and said rising food prices will be temporary due to seasonal factors, which has affected supply. ($1 = 15,688.0000 rupiah) (Additional reporting by Stanley Widianto; Editing by Kanupriya Kapoor and Muralikumar Anantharaman)