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Bank Indonesia Cuts Rate for Second Month as Growth Sputters

  • Most economists in Bloomberg survey predicted 25 bps rate cut
  • Move comes after bank agreed to share cost of virus relief
The headquarters of Bank Indonesia in Jakarta, Indonesia.

The headquarters of Bank Indonesia in Jakarta, Indonesia.

Photographer: Dimas Ardian/Bloomberg
Updated on

Bank Indonesia lowered its key interest rate for a second straight month to bolster economic growth, and signaled further easing will depend on inflation and how the recovery from the coronavirus pandemic unfolds.

The central bank cut its seven-day reverse repurchase rate by 25 basis points to 4%, the lowest since the current rate system was adopted in 2016, as predicted by 18 of 30 economists surveyed by Bloomberg. One expected a 50 basis-point cut, while 11 forecast the bank to hold rates steady.