Indonesia cuts benchmark rate

Indonesia cuts benchmark rate

A woman places a stack of Indonesian rupiah notes on a table at a moneychanger in Jakarta.
A woman places a stack of Indonesian rupiah notes on a table at a moneychanger in Jakarta.

JAKARTA: Indonesia's central bank cut its benchmark interest rate for the first time in nearly two years on Thursday in a bid to lift sluggish economic growth, moving as expected ahead of the US Federal Reserve.

Bank Indonesia (BI) trimmed the 7-day reverse repo rate by 25 basis points  to 5.75%, as predicted by 23 of 33 economists in a Reuters poll.

"BI sees, in the future, there is room for accommodative monetary policy, in line with expectations of low inflation to further support economic growth," Governor Perry Warjiyo told reporters after the central bank's two-day policy meeting.

Earlier on Thursday, South Korea's central bank unexpectedly trimmed its rates for the first time in three years to combat growing risks and an economic slowdown.

Governor Warjiyo said he hoped the rate cut could help mitigate the impact of US-China trade tensions. Growth in Southeast Asia's biggest economy has stubbornly held at around 5% in recent years and BI still sees 2019 growth below the midpoint of its 5.0%-5.4% outlook.


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