Indonesia Central Bank Lowers Key Rate Again in Bid to Lift Growth

Indonesia’s central bank, trying to help speed up sluggish economic growth, on Thursday cut its benchmark interest rate for the second time this year and lowered the banking sector’s reserve requirements in another easing move.

Thirteen of 19 economists surveyed by Reuters had predicted Bank Indonesia (BI) would cut its key rate BIPG by 25 basis points to 7.00 percent, following a trim in January of the same size.

BI kept rates unchanged for nearly all of 2015 as it sought to battle high inflation and support the country’s fragile rupiah IDR=.

The central bank also lowered its overnight deposit rate, known as the Fasbi, by 25 basis points to 5 percent, and slashed commercial banks’ rupiah reserve requirements by a hefty 100 basis points in a move expected to boost liquidity by 34 trillion rupiah ($2.52 billion).


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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.