Bank Indonesia cuts benchmark rate to record low

Warjiyo’s comments announcing the decision “actually point toward a fairly sanguine picture on the growth outlook, but the action to cut rates once again – to another record low – after a three-month hiatus, perhaps point toward the weight given to downside risks, ” said Wellian Wiranto, (pic) an economist at Oversea-Chinese Banking Corp in Singapore.

JAKARTA: Indonesia’s central bank cut its policy rate for the first time in four months yesterday, urging banks to lend more to help drive an economic recovery.

Bank Indonesia (BI) cut its seven-day reverse repurchase rate by 25 basis points to 3.75%, the lowest since the benchmark was introduced in 2016, as predicted by 11 of 26 economists surveyed by Bloomberg. One had forecast a 50 basis point cut, while the rest expected the bank to hold rates steady.