Bank Indonesia Eases

July 18, 2019

Bank Indonesia’s key 7-day reverse repo rate was reduced to 5.75% from 6.0%. It’s the first cut since September 2017. The previous changes were a pair of hikes in September and November of 2018. Today’s easing was justified by in-target inflation, lessening pressure on Indonesia’s balance of payments, and the expectation of easier Fed policy ahead. Officials seem inclined to ease further in the future: “Bank Indonesia perceives adequate space for accommodative monetary policy in line with low inflation expectations and the need to further stimulate economic growth.”

Today’s rate cut was the first easing since a 25-basis point cut in September 2017.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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