Indonesia Central Bank Resumes Monetary Easing
(RTTNews) - Indonesia's central bank reduced its benchmark interest rate for the third time this year on Wednesday, to support economic growth amid slowing inflation and continued stability in the rupiah exchange rate.
The Bank Indonesia board, led by Governor Perry Warjiyo, decided to reduce the BI rate by 25 basis points to 5.25 percent. The bank had lowered its policy rate in January and May.
Both the deposit facility rate and the lending facility rate were also lowered by 25 bps each to 4.50 percent and 6.00 percent, respectively.
The bank said the decision was consistent with lower inflation forecast for 2025 and 2026, the currency exchange rate stability, and the need to stimulate economic growth.
Bank Indonesia observed that the rupiah remained relatively stable when compared to currencies of main developing trading partners and developed countries. Going forward, the rupiah exchange rate is forecast to remain stable.
The rate cut decision came after the Southeast Asia's largest economy finalized a trade deal with the U.S. According to the new deal, the U.S. will impose only 19 percent tariff on imports from Indonesia, instead of 32 percent duty announced last week.
As part of the deal, Indonesia agreed to purchase $15 billion worth of U.S. energy, $4.5 billion worth American agricultural products and 50 Boeing jets.
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