JAKARTA - Bank Indonesia Governor Boediono and his board voted unanimously on Wednesday morning to cut interest rates by 50 basis points from the current 8.75 percent to 8.25 percent - exactly in line with analyst expectations.
The rate cut was the third in as many months for the central bank, which raised rates to a record 9.50 percent last fall to combat runaway inflation. The bank then pared rates to 9.25 percent in December and then to 8.75 percent in January before Wednesday's cut.
"Several indicators show that the global economy is gloomier than estimated several months ago," the central bank said in today's statement. "The impact is being felt in the nation, particularly in sectors related to foreign trade." Indonesia's annual inflation eased in January to 9.17 percent from 11.06 percent in December.