Indonesia central bank cuts rates on virus worries

Agence France-Presse

Posted at Feb 20 2020 06:43 PM

Indonesia central bank cuts rates on virus worries 1
An aviation security officer wearing a protective mask stands guard at Halim Perdanakusuma airport, following the outbreak of the coronavirus in China, in Jakarta, Indonesia, Feb. 15, 2020. Willy Kurniawan, Reuters

JAKARTA - Indonesia's central bank cut a key interest rate and shaved its economic growth forecast Thursday as the deadly new coronavirus batters the country's tourism and aviation sectors.

Like many countries, Indonesia has stopped all flights to mainland China in response to the outbreak, which has killed more than 2,100 people and infected over 74,000.

While Indonesia has no confirmed cases of the virus, it is worried about the impact of the epidemic on its economy and trade.

Bank of Indonesia lowered its benchmark lending rate by 25 basis points to 4.75 percent -- the first reduction since October. 

It also cut its economic growth forecast for this year to a range of 5-5.4 percent, compared with a previous estimate of 5.1-5.5 percent.

Central bank governor Perry Warjiyo said the rate cut was designed to limit the fallout from the virus. 

"Of course uncertainty in calculating the impact of COVID-19 remains high," Warjiyo said.

"We are still observing and studying the impact of the virus spread."