Indonesian central bank cuts policy rate to 5.25 percent

Kyodo News

Posted at Sep 19 2019 10:27 PM

JAKARTA - Indonesia's central bank on Thursday cut its benchmark interest rate for the third straight month in an attempt to boost domestic economic growth.

The benchmark seven-day reverse repo rate cut by 0.25 percentage point to 5.25 percent is consistent with low inflation forecasts and a well-maintained external stability marked by a current account surplus, Bank Indonesia Governor Perry Warjiyo told a press conference.

It is also considered as a preemptive measure to boost domestic economic growth amid the prolonged global trade tensions fueled by the tit-for-tat increase in trade tariffs by the United States and China, he added.

The bank previously cut the policy rate last month by 0.25 percentage point, from 5.75 to 5.50 percent, after it cut the rate for the first time in nearly two years in July, from 6.00 to 5.75 percent.

Warjiyo also said that Indonesia's economic growth is forecast to grow by at least 5.1 percent this year.