Indonesia cuts rates as virus batters South-East Asia's biggest economy


Farmers protest outside the Indonesian Parliament against cancellation of an "omnibus bill" that aims to revise dozens of existing laws to ease the way for investment in South-East Asia's largest economy in Jakarta, Indonesia, July 16, 2020. - Reuters

Jakarta, July 17 (AFP): Indonesia's central bank on Thursday (July 16) cut interest rates for the fourth time this year, with South-East Asia's biggest economy battered by the coronavirus pandemic. Policymakers at Bank Indonesia reduced the key lending rate by 25 basis points to 4.00 per cent, days after the government warned of a looming recession. Central bank governor Perry Warjiyo said the latest rate cut was a "further step" to boost the struggling economy, adding that there were signs of a recovery as a stimulus plan kicks in and virus restrictions are eased. "But we're not back to pre-pandemic levels," Warjiyo warned. Research house Capital Economics said it expected the bank to move again in the coming months. "The main reason we think further easing is likely is the poor outlook for the economy," it said, adding that output remained "very weak". Finance minister Sri Mulyani Indrawati has warned that Indonesia's economy is set to contract 4.3 percent in the second quarter and shrink again in the July-September period. Two consecutive quarters of negative growth would mark Indonesia's first recession since the 1998 Asian financial crisis. Indonesia has announced a stimulus package worth more than $48 billion to help offset the impact of coronavirus, which forced a large-scale shutdown that hammered growth, including in the key tourism sector. The South-East Asian archipelago, home to nearly 270 million people, has been easing movement restrictions in a bid to head off economic collapse. But Indonesia's Covid-19 infections are mounting as cases top 80,000 with over 3,800 deaths. The true scale of the public health crisis is widely believed to be much bigger in a country with one of the world's lowest coronavirus testing rates. - AFP

Start your ads-free experience now!

Monthly Plan

RM13.90/month

Annual Plan

RM12.33/month

Billed as RM148.00/year

1 month

Free Trial

For new subscribers only


Cancel anytime. No ads. Auto-renewal. Unlimited access to the web and app. Personalised features. Members rewards.
Follow us on our official WhatsApp channel for breaking news alerts and key updates!
   

Next In Aseanplus News

Soccer-Germany's Turks give 'host nation' welcome to Turkey
Soccer-Any ideas for a mask? Mbappe contacts rugby captain Dupont
China ready to work with Malaysia to build China-Malaysia community, says Li Qiang
Verizon uses GenAI to improve customer loyalty
Soccer-Serbia's Kostic out of Euros due to knee injury
Soccer-Fans fight in stadium before Turkey v Georgia Euro 2024 match
Austrian pro-tax heiress gives wealth to social, climate, left-wing groups
Asean News Headlines at 10pm on Tuesday (June 18, 2024)
China accuses US of "malign intention" to discredit its Covid-19 vaccines
Over 2.4 million travellers clear Woodlands, Tuas checkpoints over Hari Raya Haji long weekend

Others Also Read