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Bank Indonesia Unexpectedly Cuts Key Rate to Bolster Growth

The Rupiah

The Rupiah

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Indonesia’s central bank unexpectedly cut its main interest rate for the first time in three years, joining global counterparts in easing monetary policy to support Southeast Asia’s biggest economy as inflation cools.

Bank Indonesia Governor Agus Martowardojo and his board lowered the reference rate to 7.5 percent from 7.75 percent, the authority said in Jakarta on Tuesday. Not one of 20 economists surveyed by Bloomberg News had predicted a change. The central bank also reduced the rate it pays lenders on overnight deposits, known as the Fasbi, by 25 basis points to 5.5 percent.