JAKARTA - The Indonesian Central Bank has cut it's main interest rate by 25 basis points on Tuesday, in line with expectations. This is the 11th rate-cut in one year in response to falling inflation and a strong Indonesian currency.
19 out of 23 analysts polled had expected that the Central Bank would cut back the main rate to 8.75 percent from an earlier 9.00 percent, while the other four saw rates staying the same. “The decision was largely expected after April CPI resumed its descent while last week’s comments from BI and various government officials had all but confirmed the cut."
Bank Indonesia is eager to cut interest rates in the first half of the year in order to boost economic growth while also taking advantage of the favorable domestic and external financial market conditions.